ANNUAL REPORT
2024
Major projects completed.
Dunlop distribution launched.
Ongoing development of our
commercial tyre platforms.
Contents
Chairman’s letter
iv
Managing Director’s report
vi
Directors’ report
2
Auditor’s independence declaration
23
Consolidated statement of profit or loss and other comprehensive income
24
Consolidated statement of financial position
25
Consolidated statement of changes in equity
26
Consolidated statement of cash flows
27
Notes to the financial statements
28
Consolidated entity disclosure statement
73
Directors’ declaration
74
Independent auditor’s report to the members of NTAW Holdings Limited
75
Shareholder information
80
Corporate directory
82
iii
Dear Shareholders
I am pleased to submit this Annual Report to you.
The 2024 financial year was another period of substantial change for your Company. During the year NTAW Holdings
Limited (the “Group” and the “Company”):
•
rationalised the Australian wholesale product portfolio by ceasing the distribution of products imported by other
wholesalers and low margin imported products;
•
negotiated an agreement to distribute Dunlop tyres in Australia and New Zealand with sales of this iconic brand
commencing in November 2023 (New Zealand) and April 2024 (Australia). Dunlop will become the Group’s largest
selling brand;
•
combined the businesses of ETD (AU), Tyres4U (AU) and Dunlop enabling customers to access a larger range of
brands and products;
•
modernised the Group’s distribution platform with the completion of a new distribution centre in Perth, WA and
preparations for a new warehouse in Palmerston North, NZ; and made significant changes to the Board and senior
management.
On 18 September 2024, NTAW Holdings announced:
•
a $12.41 million capital raising from an underwritten non-renounceable entitlement offer to existing shareholders
on a one (1) for four (4) basis resulting in the issue of 33,534,024 new shares; and
•
a $20 million increase to its trade finance facility with CBA that will be available to the Group until 30 September
2027. The terms of this increase are subject to documents satisfactory to CBA being agreed and signed.
The capital raised from the entitlement offer will be used for working capital required to distribute Dunlop tyres and
to meet costs associated with the offer. The Company will use the trade finance facility as and when required to fund
working capital for the Dunlop distribution business.
The Group’s financial performance in FY2024 was mixed, with 8 business units contributing profits that were partly
offset by losses in Tyres4U (AU) and Tyreright Operations. The Board is confident that appropriate remedial action is
being taken. The Group’s FY2024 result was also adversely impacted by a difficult operating environment due to low
economic growth and poor consumer sentiment in the Group’s markets. Carter’s in NZ has been adversely affected by
the recession in that country and it should recover lost sales as NZ emerges from that recession.
The changes and the recent acquisitions outlined above put your Company in a good position to improve performance
and benefit from changes in the industry. The seeds of that improvement are evident from the increase in gross profit
(3%) and gross profit margin (350 bps) despite an 8% reduction in revenue in FY2024.
Net Operating Cash Flow improved due to strong receipts from the Dunlop launch in 4Q24 in Australia and lower
payments to suppliers in that quarter. Operating cash flows will be lower in FY2025 as payments are made for the
Dunlop commencement inventory.
In FY2024, the Group delivered a net profit after tax of $1.2 million (FY23: $2.9 million). This translated into a basic
earnings per share of 1.17 cents per share (FY23 2.51 cents per share). This is obviously an unacceptable return for the
Company and its shareholders.
iv
Chairman’s letter
Murray Boyte
Chairman
I and my Board get no pleasure from communicating to shareholders that no dividend has been declared in
respect of FY2024. The Board is mindful that the Company’s performance needs to markedly improve to provide
adequate returns to shareholders and to generate funds for future profitable investment opportunities.
During the financial year, the Board addressed succession planning in its annual review. Independent Director
and Audit & Risk Committee Chairman Mr Bill Cook retired after 11 years of service. Bill made a significant
contribution to the development of the NTAW Group over the years.
Sadly, long-standing Director Rob Kent passed away suddenly in January 2024. Rob had also made a significant
contribution to the development of NTAW’s sales and marketing programs across the brand portfolio.
We are all grateful for the significant contributions Bill and Rob made to your Company throughout their tenure
as Directors.
Three new Directors were appointed during the year. Mr Ken Gunderson-Briggs was appointed in December
2023. Ken is an experienced public company director with strong risk management, financial and commercial
skills. He has assumed the role of Chairman of the Audit & Risk Committee and Chairman of the Remuneration &
Nominations Committee.
Mr Chris Hummer was appointed as an Executive Director in December 2023. Chris has been in the tyre industry
for over 35 years. Chris was the founder of Dynamic Wheel Co and has been part of the senior management
team since it was acquired by NTAW Holdings in 2013. Chris has also worked in overseas tyre markets. Chris is
President of the Victorian Automotive Chamber of Commerce.
Mr Tynan Young was appointed to the Board in January 2024. Tynan is an outstanding executive who is in a
technology leadership role with an international group. Tynan brings a unique skill set which will greatly assist
the Company as it responds to the challenges of an ever-changing technology environment.
The executive management team has been strengthened by the appointment of new managers with extensive
management and tyre industry experience:
•
Mr Warwick Hay as Chief Operating Officer of the Company;
•
Mr Simon Billington to Chief Executive Officer of National Tyre & Wheel Pty Ltd; and
•
Mr Geoff May as Chief Executive Officer of Black Rubber.
While the economic outlook in Australia and New Zealand remains uncertain, the initiatives taken in FY2024 will
allow your Company to meet those challenges and opportunities ahead, with confidence.
Your Board, management and employees have worked diligently and constructively during the year and that
effort is appreciated.
I would like to thank our staff, customers, suppliers and shareholders for the support they have delivered over
the past year.
v
Chairman’s letter (cont)
Despite a year of mixed
results from the Group,
we are in a good
position to improve
performance and benefit
from changes in
the industry
Introduction
NTAW Holdings Limited (“NTAW Holdings” or “Company”) entered FY2024 as the parent of 11 business units, each
operating separately. The Group was formed by acquisitions to build scale and diversity over the past 10 years.
Your company is focussed on building core brands and combining or establishing new links between our business units
to enhance customer experiences.
At the end of FY2024, the Group operates in 3 core business segments illustrated as follows:
Industry and Operations - Overview
The Australian tyre & wheel industry is estimated to generate revenue of approximately $5.6 billion per annum with
the sale of more than 20 million tyres and wheels. The wholesale sector of the industry is estimated to generate
revenue of approximately $3.7 billion per annum.
No new tyres are manufactured in Australia or New Zealand. Truck and bus tyres are able to be re-treaded.
The tyre industry is segmented in the following ways:
Supply Chain roles
Importers and Wholesalers
- importers and wholesalers owned by offshore manufacturers;
- providers of logistics services to importers; and
- independent wholesalers i.e., wholesalers who provide logistics, sales and marketing services to distribute tyres
imported from manufacturers who are not otherwise present in Australia or New Zealand.
Retailers
- specialty tyre retailers, some of whom are owned by, or affiliated with, a manufacturer;
- specialty tyre retailers some of whom are affiliated via a franchise, license or co-operative scheme; and
- other tyre re-sellers including mechanics and car dealers.
vi
Managing Director’s report
Vehicle Fitment
Tyres are typically segmented based on vehicle fitment (e.g. truck, bus, car, 4WD, SUV, vans, trailers and
agricultural vehicles). This segmentation is based on differences in tyre construction and purchasing behaviour.
Where do we fit?
The Group specialises in wholesale and retail sales of commercial and consumer tyres and wheels. The Group
primarily operates in Australia and New Zealand. It has a 50% interest in a small wholesale business based in
South Africa.
Each of the Group’s business units within the 3 core business segments specialise in offering a variety of products
that are fit for a variety of different vehicles and provide services that meet the needs of customers with distinct
buying behaviours within the each of the industry segments, including the re-treading of truck and bus tyres, and
fleet management know-how.
vii
Managing Director’s report (cont)
The Group focusses on building leading brands in each market segment, meeting service level expectations,
being easy to deal with and providing loyalty incentives, all essential requirements for competing effectively.
The following picture illustrates the brand portfolio of the Australian wholesale businesses:
Opportunities in the commercial retail businesses
As part of the Group’s commercial retail businesses, Black Rubber in Australia and Carter’s in New Zealand
specialise in supplying truck and bus tyres to commercial fleet owners and managing the performance of the tyres
through in-house technology, providing the resulting required services (e.g. fitting) through company owned and
affiliated tyre stores.
Black Rubber’s commercial tyre business is underpinned by a partnership agreement with Michelin, a leading tyre
manufacturer, that includes support for Black Rubber’s commercial hubs operating as Michelin Service Centres
and a licence for Black Rubber to manufacture retreads using Michelin’s raw materials.
Tyreright is a group of retail tyre stores operating under licence from National Tyre and Wheel Pty Ltd. The Group
has reduced the number of company owned Tyreright stores in the past 2 years, with 5 stores converted to Black
Rubber commercial hubs, providing tyre performance management services to Black Rubber customers, whilst the
remaining stores are expected to be sold, converted to Black Rubber or closed by 2H25.
Carter’s owns 24 retail stores and has licensed 11 stores to support the tyre performance management services
delivered to Carter’s fleet customers.
The Group owns Solid Plus, a business specialising in supplying industrial tyres (mainly forklift tyres) and fitting the
tyres at the premises of the customers.
Together Carter’s and Black Rubber own and operate 6 retreading factories (2 in NZ and 4 in Australia, including
Brooklyn). Retreading is the most effective way to recycle used tyres for large vehicles such as trucks and buses
– all but the tread element of the tyre can be reused. The Group expects demand for retreads to grow as a cost
effective way to satisfy customer growing demand for sustainable tyre solutions.
viii
Managing Director’s report (cont)
The Group has a national distribution capability to serve the retail chains and customer groups that operate
nationally. The Group’s wholesale distribution footprint in Australia and New Zealand is illustrated below:
ix
Managing Director’s report (cont)
The Group distributes a diversified portfolio of products under long standing relationships with various suppliers.
In FY2024, the Group introduced Dunlop brand tyres to the portfolio and actively reduced its product portfolio to
remove low margin products and brands imported by other wholesalers.
The Group’s tyre and wheel brand portfolio includes the NTAW brands outlined above and other brands:
The FY2024 business unit revenue segmentation amongst these categories, and amongst Australia, New Zealand and
South Africa, can be summarised as follows:
Consumer
Retail
7%
Consumer
Wholesale
44%
Commercial
Retail
22%
Commercial
Wholesale
27%
The Group employs over 850 people.
x
Managing Director’s report (cont)
Operations - 2024 Financial Year
2024 has been a year of strong transition:
•
In September 2023, the Group entered into an agreement to distribute the Dunlop brand of tyres in Australia and
New Zealand. The Dunlop brand is iconic, having been continuously made and/or sold in Australia for more than
125 years – most of the time by an Australian company.
•
In October 2023, Tyres4U (AU) reduced its product portfolio focussing on fewer core brands with stronger
margins.
•
In November 2023, the Group moved to a new purpose built distribution centre in Perth, WA, completing a
3-year program to modernise its major Australian warehouse properties.
•
From April 2024, the Group engineered the combination of its largest business units – ETD (AU), Tyres4U (AU)
and Dunlop distribution into a subsidiary called National Tyre and Wheel Pty Ltd (“NTAW”), with the parent
company changing its name to NTAW Holdings Limited.
•
On 2 April 2024:
ͳ The Group’s wholesale distribution of Dunlop branded tyres in Australia commenced; and
ͳ All customers gained access to the same ordering and financial management platform as an easy “one
stop” entrée to a much wider array of brands and products, purchased on one running account, enhancing
the customer experience.
The changes saw revenue reduce from the older part of the wholesaling operations on a like for like basis, but
with higher margins and growth in gross profit from the new core product portfolio. The Dunlop launch in 4Q24 in
Australia added revenue and profit.
Demand for various products was affected by some lingering supply chain issues in 1H24, notably supplier fill
rates and an imperfect product mix in some categories. Operating conditions in FY2024 were difficult due to low
economic growth and poor consumer sentiment. The NZ recession, in particular, adversely affected demand in
that market.
Results were mixed throughout the Group, with profits from 8 business units partly offset by losses from Tyres4U
(AU) and Tyreright Operations. Remedial action taken to deal included the continuing disposal of company owned
Tyreright stores, changes to the product mix, combining the large Australian wholesale businesses, moving
businesses onto the same operating platform and the recruitment of managers with operational and industry
experience.
xi
Managing Director’s report (cont)
Post Balance Date Events
On 18 September 2024 NTAW Holdings announced $12.41 million capital raising from an underwritten
non-renounceable entitlement offer to existing shareholders on a one (1) for four (4) basis resulting in the issue of
33,534,024 new shares at an issue price of $0.37 per share.
The capital raised from the entitlement offer will be used for working capital required to distribute Dunlop tyres and
to meet costs associated with the offer.
On 13 September 2024, the Company received credit approved terms from CBA for an increase in its trade finance
facility from $73 million to $93 million. The Company will use these facilities as and when required to fund working
capital for the Dunlop distribution business. The facility expires on 30 September 2027 with the next annual review
due in October 2025. The terms of this increase are subject to documents satisfactory to CBA being agreed and
signed.
Black Rubber acquired a commercial tyre retail store in Wingfield (Adelaide) early in September 2024. The store will
become a Michelin Service Centre supplying products and tyre performance management to Black Rubber’s fleet
customers.
Tyres4U (NZ) and ETD (NZ) opened a new warehouse in Palmerston North, NZ, bringing both businesses closer to
customers and enhancing service levels.
In June 2024 changes were made to the Group’s senior leadership team:
•
Mr Warwick Hay accepted an offer to become Chief Operating Officer of NTAW Holdings.
ͳ Mr Hay is the former Managing Director of ASX listed IVE Group (ASX: “IVE”).
ͳ Similar to NTAW Holdings, IVE achieved diversity and scale through acquisitions, then combining the
businesses into an efficient and effective profitable form.
ͳ Commencing on 23 September 2024, Mr Hay will assume primary responsibility for the performance of
the Australian wholesale operations (including NTAW, Dynamic and Statewide), ETD (NZ) and the People &
Culture shared services unit.
•
Mr Simon Billington was appointed CEO of NTAW, consolidating the management of ETD (AU), Tyres4U (AU) and
Dunlop brands. Mr Billington has 24 years’ experience in the tyre industry and has served as CEO of ETD AU and
ETD NZ.
•
Mr Atila Stibinger was promoted to National Logistics Manager for NTAW.
•
Mr Geoff May was appointed CEO of Black Rubber, assisting the founder, Mr John Zelesco, as Executive Chairman
of Black Rubber. During his 10-year employment in the tyre industry with a major global brand, Mr May rose
to National Commercial Manager, having served as National Retail Systems Manager and National Fleet Sales
Manager.
Financial Results – 2024 Financial Year
The Group delivered operating EBITDA1 of $42.3 million (FY2023: $38.8 million). Operating net profit after tax and
before amortisation (“NPATA”) of $6.1 million in FY2024 (FY2023: $8.0 million). Revenue amounted to $533.4 million
(FY2023: $582.3 million).
Earnings per share was 4.3 cents per share based on Operating NPATA (FY2023: 5.7 cents per share). The Group’s
statutory NPATA attributable to NTAW Holdings shareholders mounted to $3.7 million (FY2023: $5.5 million).
1 Refer to table on the next page
xii
Managing Director’s report (cont)
The following table summarises the key financial metrics for the Group:
Higher Operating EBITDA did not translate to higher Operating NPATA due to impact of AASB 16 Leases and an
unusually high tax adjustment.
The following table reconciles Statutory EBITDA to Operating EBITDA, adjusting for $2.4 million of
non-recurring costs in FY2024;
The Group has a strong balance sheet with total assets of $413.1 million and net assets of $117.3 million at
30 June 2024 (Jun-23: $115.3 million). The net debt position at 30 June 2024 was $52.2 million (Jun-23: $60.2
million) and a net debt to Equity + debt ratio of 25.0%.
No dividend has been declared for FY2024, with your Company preserving cash to fund increases in working
capital associated with the new distribution of Dunlop tyres. The Company has $20.3 million
franking credits available.
Key Operating Metrics
FY24
FY23
Gross profit margin
31.6%
28.1%
Operating costs as a % of revenue
24.1%
21.9%
EBITDA margin
7.5%
6.2%
Basic EPS (cents)
1.2
2.5
Dividend per share (cents)
-
-
Operating cash flow ($ million)
35.2
26.2
Interest cover (times)
3.7x
4.3x
Reconciliation of Reported EBITDA to Operating EBITDA
$’000
FY24
FY23
Net profit after tax
1,242
2,895
Income tax expense
2,167
960
Net profit before tax
3,409
3,855
Finance costs (net)
10,806
8,378
Reported EBIT
14,215
12,233
Depreciation and amortisation
25,770
24,040
Reported EBITDA
39,985
36,273
IT project implementation costs
1,242
1,203
Acquisition costs
683
-
Impairment charges
270
-
Warehouse consolidation costs
198
457
Store disposals and redundancy costs
-
710
Unrealised FX loss/(gain)
(35)
185
Operating EBITDA
42,343
38,828
Reconciliation of Operating EBITDA to Operating NPATA
$’000
FY24
FY23
Operating EBITDA
42,343
38,828
Depreciation - PPE
(3,929)
(3,527)
Depreciation - ROU assets
(18,972)
(17,655)
Finance costs - borrowings
(6,878)
(6,238)
Finance costs - lease liabilities
(3,929)
(2,140)
Income tax expense
(2,869)
(1,656)
Non-controlling interest
321
436
Operating NPATA attributable to s’holders
6,087
8,048
EPS (cents)
4.54
5.82
xiii
Managing Director’s report (cont)
Outlook
The Group’s outlook is cautious having regard to various macro-economic and geopolitical risks and the present
relatively poor consumer sentiment and low growth economies in Australia, New Zealand and South Africa.
NTAW’s first full year as the Dunlop distributor in Australia and New Zealand is expected to provide revenue and
profit growth, with modest sales growth of other core Group brands.
Additional revenue growth is expected from executing the Black Rubber expansion plan.
Carter’s revenue fell in 2H24 as the New Zealand economy slowed. Recovery of this revenue in 2H25 is expected if
the economy recovers. Revenue growth in NZ wholesale is expected from the opening of a new distribution centre in
Palmerston North.
Group expenses in FY24 ($130m) were slightly higher than FY23 ($127m) but increased as a percentage of revenue.
The Group will manage discretionary expenditure in FY25 targeting a lower expense to revenue ratio from changes to
the Group’s organisational structure, productivity improvements in the logistics teams and continued decentralization
of head office activities.
There are a number of important industry dynamics that will present growth opportunities for the Group,
summarised in the following table:
The Company has announced its intention to raise capital of $12.41 million via an underwritten 1 for 4 entitlement
offer to shareholders. The Company has also arranged an increase in its trade finance facility from CBA. This capital
will assist the Group to take advantage of opportunities as they arise.
Industry Opportunity
NTAW Group Action
Manufacturers reconsider vertical
integration – leading to more intermediation
(e.g. third-party distributors)
- Reduce product portfolios to remove internal competition and help suppliers of “core
brands” build equity.
- Operate the largest distribution platform in Australia and New Zealand.
- Accept strategic distribution opportunities (e.g. Dunlop).
Tyre performance management and fitting
services for vehicle fleet owners
- Own and operate leading, proprietary tyre performance management systems.
- Operate a service network, including company owned specialist truck and bus tyre retail
facilities
- Deliver products and services at customer depots.
- Provide these solutions nationally for large fleets.
Assist customers meet sustainability
objectives
- Manufacture retreads – the most effective form of tyre recycling for truck and bus tyres.
- Build this solution nationally in Australia and New Zealand.
- Offer a range of retread products to suit customers.
Achieve high levels of service – product
range, availability and prompt delivery
- Operate 18 modern, large distribution centres in Australia and New Zealand.
- Invest in equipment and technology to meet service levels.
- Focus on availability of core brands.
- One sales platform for Dunlop as well as Tyres4U and ETD brands in Australia.
Support busy retailers – transactional ease,
promotional support, expert advice and
incentives
- Be easy to do business with - on a uniform business platform; employ category experts;
offer financial and qualitative incentives as well as loyalty programs with attractive
reward options.
- Provide media content and support customers media choices.
xiv
Managing Director’s report (cont)
Acknowledgements
It has been a year of important transitional developments for your Company, with substantial projects being
completed, the culmination of considerable and diligent work by employees. This effort is both acknowledged and
greatly appreciated.
The Group enjoys continuing support from suppliers and customers, reciprocated by enhancing customer experiences
and our Group-wide commitment to building up our product brands.
The continuing support of our suppliers, customers and shareholders will assist us to make the most of any
opportunities that arise.
The NTAW Holdings Board and senior management team is very grateful for the support received
from all stakeholders.
Yours faithfully
Peter Ludemann
xv
Managing Director’s report (cont)
Your company is focussed on
building core brands and
combining or establishing new
links between our business
units to enhance
FINANCIAL REPORT
Directors’ report
30 June 2024
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the
“Group”) consisting of NTAW Holdings Limited (formerly “National Tyre & Wheel Limited”) (referred to hereafter as the “Company”,
“NTAW Holdings”, or “parent entity”) and the entities it controlled at the end of, or during, the year ended 30 June 2024.
Directors
The following persons were directors of NTAW Holdings Limited during the whole of the financial year and up to the date of this
report, unless otherwise stated:
Murray Boyte
Independent Non-Executive Chairman
Peter Ludemann
Managing Director and Chief Executive Officer
Terry Smith
Non-Executive Director
Bill Cook
Independent Non-Executive Director (ceased 27 February 2024)
Robert Kent
Executive Director (ceased 28 January 2024)
Kenneth Gunderson-Briggs
Independent Non-Executive Director (appointed 13 December 2023)
Christopher Hummer
Executive Director (appointed 13 December 2023)
Tynan Young
Independent Non-Executive Director (appointed 30 January 2024)
Principal activities
The principal activity of the Group during the financial year ended 30 June 2024 was the distribution and marketing of motor vehicle
tyres, wheels, tubes and related products throughout Australia, New Zealand and South Africa.
NTAW Holdings is the holding company for the following operating subsidiaries:
National Tyre & Wheel Pty Ltd (“NTAW”) (formerly “Exclusive Tyre Distributors Pty Ltd” (“ETD”));
Exclusive Tyre Distributors (NZ) Limited (“ETDNZ”);
Dynamic Wheel Co. Pty Limited (“Dynamic” or “DWC”);
Statewide Tyre Distribution Pty Ltd (“Statewide”);
Top Draw Tyres Proprietary Limited t/a Tyrelife Solutions (“TLS”);
Tyres4U (NZ) Ltd (“Tyres4U NZ”);
Tyreright Operations Pty Ltd (“TRT”);
Black Rubber Pty Ltd & Black Rubber Sydney Pty Ltd (collectively “Black Rubber”);
Carters Tyre Service Limited, C.O. Tire & Retreading Co Limited & Tyre Distributors New Zealand Limited (collectively
“Carter’s”);
Solid Plus Operations Pty Ltd (“SPO”);
ACN 117 639 040 Pty Ltd (formerly “Integrated OE Pty Ltd”); and
ACN 642 540 690 Pty Ltd (formerly ”Tyres4U Pty Ltd” (“Tyres4U AU”))
There have been no significant changes in the nature of the Group’s activities during the year.
Dividends
Dividends paid during the financial year were as follows:
2024
2023
$'000
$'000
Final dividend (2023: $1.50 per ordinary share paid on 7 October 2022)
-
1,981
Interim dividend
-
-
-
1,981
At the date of signing these financial statements, there has been no dividends declared in respect of the 2024 financial year by
the Company and no dividend’s payable.
2
Directors’ report
30 June 2024
Operating and financial review
Review of operations
In FY2024, the Group achieved revenue of $533,431,000 and an operating EBITDA of $42,343,000. FY2024 Operating NPATA was
$5,766,000.
In FY2024, demand for the Group’s products was constrained by low economic growth and weak consumer sentiment. A
recession in New Zealand had a negative impact on Carter’s commercial truck tyre sales and trading conditions for TLS in South
Africa remained difficult.
Goodyear’s exit from wholesaling and retreading in Australia and New Zealand presented opportunities for Group businesses,
including the distribution of the Dunlop brand.
Labour availability improved in FY2024 but with higher labour costs. Deliveries from suppliers were more reliable and less
expensive in FY2024.
The Group completed projects that are expected to enhance prospects for growth. These included the combination of Australian
wholesale businesses (ETD, Tyres4U AU and Dunlop), getting all businesses on the same operating system and IT platform, the
warehouse consolidation in Perth and changes to the senior management team.
The combined Australian wholesale business changed its name to National Tyre & Wheel Pty Ltd (“NTAW”) with the parent
company changing its name to NTAW Holdings Limited. The Dunlop brand fills the premium passenger car, truck and bus tyre
position in the product portfolio of NTAW and introduces NTAW to new customers.
NTAW stopped selling substitutable products, eliminating internal competition in the portfolio and improving margins. NTAW
customers gained access to a wider range of products at all touchpoints.
In FY2024, eight NTAW Holdings subsidiary businesses were profitable with losses in 4 businesses, with material losses in Tyres4U
AU and TRT. The Group response to these losses included brand rationalisation, new business combinations, changes to operating
systems and changes to the senior management team outlined above as well as the continuing sale or closure of company owned
Tyreright stores.
Black Rubber continued to prepare for growth in the truck, bus and earthmover segments by taking over five Tyreright stores and
adopting the commercial hub model successfully adopted at Black Rubber’s Western Australian operations. After the balance
date, Black Rubber entered into Agreements to acquire a retreading factory in Melbourne and commercial tyre retail business in
Adelaide from Goodyear, with both purchases expected to be completed in 1Q25.
During the financial year, the NTAW Holdings Board changed with the appointments of Mr Christopher Hummer (Dynamic CEO),
Mr Kenneth Gunderson-Briggs (also chairman of the Audit & Risk Committee and the Remuneration Committee) in Dec-23 and
Mr Tynan Young in Feb-24. Mr Bill Cook resigned (Feb-24) and, sadly, Mr Robert Kent passed away suddenly (Jan-24).
In Jun-24:
Mr Warwick Hay accepted an offer to join NTAW Holdings as Chief Operating Officer, commencing in September 2024
and taking responsibility for NTAW, DWC, ETD (NZ) and the people & culture shared services team;
Mr Simon Billington was appointed CEO of NTAW, consolidating the management of that business; and
Mr Geoff May was appointed CEO of Black Rubber with Mr John Zelesco as Executive Chairman.
3
Directors’ report
30 June 2024
Results highlights
NTAW Holdings has reported total revenue of $533,431,000 (2023: $582,284,000) for the financial year, a decrease of $48,853,000
(8.4%) on the prior year.
NTAW Holdings’ statutory profit for the Group after providing for income tax and non-controlling interests amounted to $1,242,000
(2023: $2,895,000).
NTAW Holdings has a strong balance sheet with net assets of $117,296,000 (Jun-23: $115,340,000). The net debt position was
$52,178,000 (Jun-23: $60,206,000) and a ‘net debt to equity + gross debt’ ratio of 25.0% (Jun-23: 28.9% ).
Key operating metrics
FY2024
FY2023
Gross profit margin
31.6%
28.1%
Operating costs as % of total revenue
24.1%
21.9%
Reported EBITDA1 margin
7.5%
6.2%
Operating EBITDA2 margin
7.9%
6.7%
1 EBITDA means earnings before interest, tax, depreciation and amortisation.
2 Refer to reconciliation between Reported EBITDA and Operating EBITDA below.
NTAW Holdings has reported a gross profit margin of 31.6% and an Operating EBITDA margin of 7.9%, with gross profit margin
and Operating EBITDA margin increasing from that achieved in the prior year. The Group’s operating costs as a percentage of
sales of 24.1% was slightly greater than prior year due to one off consultancy costs in FY24.
Key financial results
$'000
FY2024
FY2023
Sales revenue
533,431
582,284
Gross profit
168,439
163,821
Reported EBITDA
39,985
36,273
Operating EBITDA
42,343
38,828
NPATA attributable to NTAW Holdings 1
3,730
5,490
1 NPATA excludes non-controlling interests and amortisation on a tax effected basis.
Operating EBITDA
The Group has reported an EBITDA of $39,985,000 (2023: $36,273,000). The result for FY2024 includes non-recurring costs of
$2,393,000 related to IT project implementation, an impairment loss, warehouse consolidation and store disposals and acquisition
and consultancy costs. Unrealised foreign exchange gain on foreign exchange contracts and foreign currency denominated suppliers
of $35,000 (2023: $185,000 loss) was recognised during the year. After taking into account the above items, an Operating EBITDA
of $42,343,000 was earned in the reporting period (FY2023: $38,828,000) as shown in the following table:
$'000
FY2024
FY2023
Net profit after tax
1,242
2,895
Depreciation and amortisation
25,770
24,040
Finance costs (net)
10,806
8,378
Income tax expense
2,167
960
Reported EBITDA
39,985
36,273
IT project implementation costs
1,242
1,203
Impairment loss
270
-
Warehouse consolidation and store disposal costs
198
1,167
Acquisition and consultancy costs
683
-
Unrealised foreign exchange (gains)/losses
(35)
185
Operating EBITDA
42,343
38,828
4
Directors’ report
30 June 2024
Financial Position
Key financial information in relation to the Group’s financial position at year end is shown below:
30 June 2024
30 June 2023
Total assets ($’000)
413,097
376,047
Net assets ($’000)
117,296
115,340
Net debt1 ($’000)
52,178
60,206
Shares on issue (‘000)
134,136
133,271
Dividends per security (cents)
-
-
1 Net debt is total borrowings less cash and cash equivalents.
Significant balance sheet movements during the financial year were as follows:
Net debt has decreased by $8,028,000;
Net assets have slightly increased by $1,956,000; and
864,776 share options were redeemed for ordinary shares in FY2024.
Outlook
The Group’s outlook is cautious having regard to various macro-economic and geopolitical risks and the present relatively poor
consumer sentiment and low growth economies in Australia, New Zealand and South Africa.
NTAW’s first full year as the Dunlop distributor in Australia and New Zealand is expected to provide revenue growth, with modest
sales growth of other core NTAW brands.
Revenue growth is expected from executing the Black Rubber expansion plan, particularly if the Brooklyn retread factory and
Wingfield tyre store assets are acquired.
Carter’s Tyre Service revenue fell in 2H24 as the New Zealand economy slowed. Recovery of this revenue is expected in 2H25.
Revenue growth is expected from the opening of a new distribution centre in Palmerston North (NZ).
As the Group grows, it will require capital to:
fund working capital required for the Dunlop distribution business;
replenish capital used to acquire the Brooklyn retread factory and the Wingfield retail store;
upgrade equipment for the Black Rubber expansion plans and to improve service levels in other businesses; and
fund equipment required for the new warehouse in Palmerston North.
The Group is considering options to meet these requirements.
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the Group during the financial year.
Matters subsequent to the end of the financial year
On 17 July 2024, Black Rubber entered into an asset sale agreement to purchase the assets, inventory and plant & equipment, of a
tyre retreading plant located in Brooklyn, Melbourne, Victoria from Goodyear & Dunlop Tyres (Aust) Pty Ltd. Completion of this
agreement is subject to certain conditions.
On 8 August 2024, Black Rubber entered into an asset sale agreement to purchase the assets, inventory and plant & equipment,
of a commercial tyre retail store located in Wingfield, Adelaide, South Australia from Goodyear & Dunlop Tyres (Aust) Pty Ltd.
Completion of this agreement is subject to certain conditions.
No other matter or circumstance has arisen since 30 June 2024 that has significantly affected, or may significantly affect the Group's
operations, the results of those operations, or the Group's state of affairs in future financial years.
5
Directors’ report
30 June 2024
Likely developments and expected results of operations
The Group will continue to pursue gross profit improvement and additional cost reductions in the next financial year as it seeks to
leverage the diversity and scale built up in recent years.
Material business risks
The Board is committed to monitoring and mitigating business risks faced by the Group, including the following key risks that have
the potential to materially impact its financial prospects:
Changes to macro-economic conditions and government policy – the prices of raw materials used in the manufacture of
tyres as well as shipping costs can be volatile and are affected by supply and demand, both globally and regionally.
Macroeconomic and geopolitical uncertainties can also affect the supply of, and demand for, the Group’s products.
Government and Reserve Bank fiscal, monetary, trade and regulatory policy can impact interest rate and exchange rate
movements, inflation (CPI), wages, employment, the composition of the vehicle fleet, consumer confidence, retail
spending, goods movements and overall demand for consumer and commercial tyres and wheels. Geopolitical tensions
can also impact consumer confidence, demand for commercial tyres and wheels as well as international trade. The Group
seeks to reduce its exposure to these risks by operating diverse businesses, selling products that have an array of
price/value propositions, having a low level of concentration amongst customers, maintaining a cadence of new products
suitable for new vehicle types (e.g. electric and hybrid cars) and sourcing information to obtain insights about actual and
potential changes.
Supplier risk – the Group imports and distributes products manufactured by third parties, primarily located in China, India,
USA, Taiwan and Indonesia. Apart from the manufacture of some retreaded truck and bus tyres, there is no tyre
manufacturing in Australia or New Zealand. Most wheel manufacturing also occurs outside of Australia. Some tyre and
wheel manufacturers directly distribute their products in Australia and/or New Zealand while others rely on third party
distributors like the Group for the distribution of their products. The Group has been distributing brands such as Cooper,
Mickey Thompson, Alliance, Double Coin, GT Radial and Advance for more than 20 years. In addition to these long-term
supply relationships, the Company imports and distributes Radar, Tracmax, Dunlop, Sailun and Dynamo brands. There are
risks that suppliers will cease manufacturing, be persuaded to shift distribution to another firm or decide to import and
distribute for themselves. There are also risks that a supplier’s products will not respond to changes in the vehicle fleet,
that new competing products will emerge or that the market position of a brand will not resonate with consumers or
commercial customers. The Group seeks to manage these risks by entering into long term formal contracts with suppliers,
maintaining less formal or shorter agreements, setting and meeting realistic expectations of sales performance,
monitoring levels of supplier concentration and collaborating with suppliers in connection with product development,
brand architecture and product development.
Foreign exchange risk – a significant proportion of the Group’s costs and expenses are transacted in foreign currencies.
Adverse movements between the Australian Dollar, New Zealand Dollar and South African Rand against the US Dollar
increases the price at which the Group acquires its trading stock and result in volatility in profitability to the extent that
the Group may or may not be able to pass on price increases to its customers (after allowing for the impact inventory
cycles have on the time it takes for exchange rate movements to impact on cost of goods sold and the behaviour of
competitors). The Group also seeks to use foreign exchange contracts to mitigate its foreign exchange exposures. The
effect of foreign currency translation on operating results from offshore operations remains inherent in the Group’s
business.
Business integration risk – the Group has acquired interests in several businesses in recent years with the successful
integration and capturing of synergies from the acquisitions and managing growth being critical to the Group’s continued
performance and earnings. The Group’s Board and management is experienced in acquiring and integrating businesses,
conducts comprehensive due diligence and ensures an integration plan is followed.
Retention of key personnel – the Group’s future success is dependent on the expertise and experience of its key personnel
and management. The loss of services of key members of management, and any delay in their replacement, or the failure
to attract additional key managers to new roles could have a material adverse effect on NTAW Holding’s financial
performance and ability to deliver on its growth strategies. The Group manages this risk with the ongoing development of
management capabilities, effective delegation, knowledge sharing and succession plans for all key managers.
6
Directors’ report
30 June 2024
Customer risk – the Group is dependent on its ability to retain its existing customers and attract new customers. Although
customer concentration is low, sales revenue would be adversely affected if all members of a chain or group decided not
to purchase products from the Group. Although this risk has been further reduced as a consequence of the recent
acquisitions, the Group proactively manages its customer relationships and has established value adding customer loyalty
programs.
Risk of competition – the tyre and wheel wholesale market is highly competitive. Competition is based on factors including
price, service, quality, performance standards, range and the ability to provide customers with an appropriate range of
quality products in a timely manner. A failure by the Group to effectively compete with its competitors would adversely
affect the Group’s future financial performance and position.
Cyber risk – A cyber safety risk is any threat to the confidentiality, integrity or availability of data. These threats include
attacks on technology infrastructure which generates revenue and threaten to perpetually block access to data unless a
ransom is paid (i.e. ransomware) and attacks to gain unauthorised access to data or records that can be used alone or with
other information to identify, contact or locate a single person, including a customer or employee. The Group has training
programs to alert employees to cyber risks and has implemented business continuity plans and disaster recovery plans to
respond to cyber security incidents, and mitigate financial and reputational damage from any such incidents
Sustainability risk – An actual or perceived failure to address sustainability-related topics, including climate change and
the transition to a net carbon zero economy, has the ability to impact the Company’s financial performance, reputation
and operations, either directly within the business or due to changing stakeholder expectations. To address this risk, NTAW
Holdings seeks to execute its integrated approach towards economic, environmental and social sustainability. Ensuring
this approach is effective means ensuring a range of practices are initiated, maintained and continually improved, including
managing potential issues in our supply chain and the Group’s operations, sourcing sustainable products and packaging,
where possible, and reducing carbon emissions.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
Information on Directors
Name:
Murray Boyte
Title:
Independent, Non-Executive Chairman
Qualifications
BCA, MAICD, CMInstD, CA
Experience and expertise:
Mr Boyte has over 35 years' experience in merchant banking and finance, undertaking
company reconstructions, mergers and acquisitions in Australia, New Zealand, North
America and Hong Kong. In addition, he has held executive positions and Directorships in the
transport, horticultural, financial services, investment, health services and property
industries.
Other current directorships:
Eureka Group Holdings Limited (ASX: EGH) (appointed 24 November 2017); Hillgrove
Resources Limited (ASX: HGO) (appointed 10 May 2019); Eumundi Group Limited (ASX:
EBG) (appointed 1 March 2021)
Former directorships (last 3 years):
Abano Healthcare Group Limited (NZX: ABA) (resigned 22 December 2021)
Special responsibilities:
Member of Audit and Risk Committee; Member of Remuneration and Nominations
Committee
Interests in shares:
245,211 ordinary shares
Interests in options and rights:
Nil
7
Directors’ report
30 June 2024
Name:
Peter Ludemann
Title:
Chief Executive Officer (“CEO”) and Managing Director
Qualifications:
Degrees in Law and Commerce (Marketing) from University of New South Wales
Experience and expertise:
Mr Ludemann joined the Group as a director in 2012 and became full time CEO of NTAW
Holdings in July 2013. He has worked as a commercial lawyer, a director of numerous private
companies, the Managing Director of a Life Science Investment firm and as a Private Equity
Investment Manager at AMP Capital. He has been the driving force behind the evolution of
NTAW Holdings from a closely held family trust carrying on a niche 4WD tyre wholesale
business to a more widely held entity operating in many tyre and wheel segments. He has
managed the acquisition and integration of all the subsidiaries in that time and was
responsible for the execution of a succession plan for NTAW Holdings founders, the creation
of a public company corporate structure, the IPO and listing of NTAW Holdings as well as
generational change within the Group.
Other current directorships:
Nil
Former directorships (last 3 years):
Nil
Special responsibilities:
Nil
Interests in shares:
2,817,425 ordinary shares
Interests in options and rights:
350,000 options and 628,590 rights
Name:
Terry Smith
Title:
Non-Independent, Non-Executive Director
Experience and expertise:
Mr Smith has over 40 years' experience in tyre importing, wholesaling and retailing. Terry’s
career is one of successful entrepreneurship, as he and wife Susanne, were responsible for
taking Exclusive Tyre Distributors from a start-up business to one of the largest independent
national tyre wholesalers in Australia.
Mr Smith is a Non-Executive Director but is not considered independent as he is a substantial
holder of the Company.
Other current directorships:
Nil
Former directorships (last 3 years):
Nil
Special responsibilities:
Member of Remuneration and Nominations Committee
Interests in shares:
27,891,171 ordinary shares
Interests in options and rights:
Nil
Name:
Bill Cook
Title:
Independent, Non-Executive Director (ceased 27 February 2024)
Experience and expertise:
Mr Cook was an Independent Non-Executive Director of NTAW Holdings. Mr Cook
commenced his career at Ford Motor Company in finance. He worked for Consolidated Press
Holdings with the late Kerry Packer from 1983 to 1996 as Head of M&A and worldwide
reporting. After two years as General Manager of Qantas Flight Catering’s Sydney business
he undertook Private Equity investment consulting roles, and subsequently joined AMP
Capital as an investment manager in the Private Equity team. Since leaving AMP, Mr Cook
has served as non-executive director for a number of companies, including NTAW Holdings
since 2013.
Other current directorships:
Nil
Former directorships (last 3 years):
Nil
Special responsibilities:
Chair of Audit and Risk Committee (ceased February); Member of Remuneration and
Nominations Committee (ceased February)
Interests in shares:
460,427 ordinary shares held at time of his resignation.
Interests in options and rights:
Nil
8
Directors’ report
30 June 2024
Name:
Robert Kent
Title:
Executive Director (ceased 28 January 2024)
Qualifications:
Bachelor of Business (Marketing) from Queensland University of Technology and is a
Graduate of the Australian Institute of Company Directors.
Experience and expertise:
Mr Kent was Managing Director of Publicis Mojo (Queensland), part of the global Publicis
Groupe, from 2000 to 2017. During this time he was also a member of the Publicis National
Board of Management. Mr Kent is a career advertising and marketing executive who has
managed innumerable campaigns involving sales promotion and brand building across both
traditional and digital channels. Concurrently with his advertising role, Mr Kent was
Managing Director of leading digital marketing businesses, Personalised Plates Queensland
from 2013 to 2017 and KiwiPlates (NZ) from 2016 to 2017, after winning the tender to
operate each. Mr Kent was the Chair of the Company’s Remuneration and Nominations
Committee and a member of the Audit and Risk Committee during his tenure as a Director.
Other current directorships:
Nil
Former directorships (last 3 years):
Nil
Special responsibilities:
Chair of Remuneration and Nominations Committee; Member of Audit and Risk
Committee
Interests in shares:
331,500 ordinary shares held at the time of his resignation.
Interests in options and rights:
Nil
Name:
Kenneth Gunderson-Briggs
Title:
Independent, Non-Executive Director (appointed 13 December 2023)
Qualifications:
Bachelor of Business from the University of Technology, Sydney and is a Fellow of the CA
ANZ
Experience and expertise:
Mr Gunderson-Briggs is a Chartered Accountant and a Registered Company Auditor, being
a partner in a chartered accounting firm since 1990. Mr Gunderson-Briggs joined the
Board of Harvey Norman Holdings Limited in 2003 where he has been the Chair of the
Remuneration Committee since 2015 and Chair of the Audit & Risk and Nomination
Committees since 2020. Mr Gunderson-Briggs was a Director of Australian Pharmaceutical
Industries Limited from 2014 to 2022, being appointed as Chair of the Board in 2020.
Other current directorships:
Harvey Norman Holdings Limited (ASX: HVN) (appointed 30 June 2003)
Former directorships (last 3 years):
Australian Pharmaceutical Industries Limited (ASX: API) (resigned 31 March 2022 following
the takeover of API by Wesfarmers Limited)
Special responsibilities:
Chair of Audit and Risk Committee from March 2024; Chair of Remuneration and
Nominations Committee March 2024
Interests in shares:
Nil
Interests in options and rights:
Nil
9
Directors’ report
30 June 2024
Name:
Christopher Hummer
Title:
Executive Director (appointed 13 December 2023) and DWC Managing Director
Qualifications:
Graduate of Australian Institute of Company Directors GAICD
Experience and expertise:
An experienced company director for 35 years, Mr Hummer started his career building a
business providing 24 hour emergency roadside repairs under contract to Royal
Automobile club in Victoria, Mr Hummer has held directorships in building / construction,
Automotive and Industry Associations. Chris worked with DMIB Berhad Malaysia to launch
a range of offroad racing tyres to global markets before creating Dynamic Wheel Co in
1998. He has been responsible for growing DWC into a national wheel wholesaler since its
part acquisition by NTD in 2013 before full acquisition in 2017 and supporting the
international expansion of DWC wheel brands both in NTAW’s New Zealand and South
African entities. Mr Hummer was elected President (chair) of the Victorian Automotive
Chamber of Commerce in 2022 and is also President of The Australian Tyre Dealers and
Retread Association. Mr Hummer is a member of the Australian Chamber of Commerce
and Industry council
Other current directorships:
Nil
Former directorships (last 3 years):
Nil
Special responsibilities:
Nil
Interests in shares:
2,387,488 ordinary shares
Interests in options and rights:
225,721 rights
Name:
Tynan Young
Title:
Independent, Non-Executive Director (appointed 30 January 2024)
Experience and expertise:
Mr Young has had a successful career within the technology sector, working in the media,
finance and technology industries. Mr Young currently holds a technology leadership role
at a leading data and research-driven trading business. Mr Young was previously the
Global Head of Network and Data Centre at The Trade Desk (NASDAQ: TTD). Mr Young is a
member of the Audit & Risk Committee.
Other current directorships:
Nil
Former directorships (last 3 years):
Nil
Special responsibilities:
Member of Audit and Risk Committee
Interests in shares:
7,460,609
Interests in options and rights:
Nil
Company secretaries
Jason Lamb
Mr Lamb is the Chief Financial Officer and joint Company Secretary. Mr Lamb has over 20 years’ accountancy experience. He is a
Certified Practicing Accountant with a Bachelor of Commerce (Accounting) and a Bachelor of Economics from The University of
Queensland. Mr Lamb was responsible for setting up the financial accounting systems for NTAW Holdings. He has also been
responsible for all financial due diligence work relating to business acquisitions and the establishment of financial reporting
systems for those operating entities. He participates in all Board meetings for NTAW Holdings and each operating entity as well as
overseeing the production of financial reports for all entities.
Hugh McMurchy
Mr McMurchy is the Group Financial Controller and joint Company Secretary. Mr McMurchy is a Chartered Accountant with a
Bachelor of Commerce (Accounting and Finance) from The University of Queensland. Mr McMurchy has over 10 years’ experience
in public accounting before joining NTAW Holdings in 2020.
10
Directors’ report
30 June 2024
Meetings of directors
The number of meetings of the Company's Board of Directors (“the Board”) and of each Board committee held during the year
ended 30 June 2024, and the number of meetings attended by each director were:
Board
Remuneration and Nominations
Committee
Audit and Risk Committee
Attended
Held
Attended
Held
Attended
Held
Murray Boyte
17
17
2
2
3
3
Peter Ludemann
17
17
2*
2*
3*
3*
Terry Smith
17
17
2
2
2*
3*
Bill Cook
12
13
1
1
3
3
Robert Kent
9
9
1
1
1
1
Kenneth Gunderson-Briggs
8
8
1
1
2
2
Christopher Hummer
8
8
1*
1*
2*
2*
Tynan Young
6
7
-
-
1
2
*Attended by invitation only
Remuneration Report (audited)
The remuneration report details the key management personnel (“KMP”) remuneration arrangements for the Group, in accordance
with the requirements of the Corporations Act 2001 and Corporations Regulations 2001.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
a) Principles used to determine the nature and amount of remuneration
b) Details of remuneration
c)
Relationship between remuneration and Company performance
d) Service agreements
e) Share-based compensation
f)
Equity instruments held by key management personnel
g) Other transactions with key management personnel
(a) Principles used to determine the nature and amount of remuneration
The objective of the Group's executive remuneration framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework aligns executive remuneration with the achievement of strategic objectives
and the creation of value for shareholders, and it is considered to conform with accepted market practice for remuneration and
reward. The Board of Directors ensures that executive remuneration satisfies the following key criteria for good remuneration
governance practices:
competitiveness and reasonableness;
acceptability to shareholders;
performance linkage / alignment of executive compensation; and
transparency.
The Remuneration and Nominations Committee is responsible for reviewing remuneration arrangements for its directors and
executives and making recommendations to the Board for consideration and approval. The performance of the Group depends on
the quality of its directors and executives. The remuneration philosophy is to attract, motivate and retain high performance and
high-quality personnel.
The Remuneration and Nominations Committee has structured an executive remuneration framework that is market competitive
and complementary to the reward strategy of the Group, as determined by the Board.
11
Directors’ report
30 June 2024
Remuneration report (audited) (continued)
The reward framework is designed to align executive reward to shareholders' interests. The Board considers that it should seek to
enhance shareholders' interests by:
having economic profit as a core component of plan design;
focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering
constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value; and
attracting and retaining high calibre executives.
Additionally, the reward framework should seek to enhance executives' interests by:
rewarding capability and experience;
reflecting competitive reward for contribution to growth in shareholder wealth; and
providing a clear structure for earning rewards.
Since the Company’s listing on the Australian Securities Exchange (“ASX”), in accordance with best practice corporate governance,
the structure of non-executive director and executive director remuneration is separate.
Non-executive directors' remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive directors' fees
and payments are reviewed annually by the Remuneration and Nominations Committee. The chairman's fees are determined
independently to the fees of other non-executive directors based on comparative roles in the external market. The chairman is not
present at any discussions relating to the determination of his own remuneration. The non-executive directors do not receive share
options or other incentives.
Under NTAW Holdings’ constitution, the directors decide the total amount paid to all directors as remuneration for their services.
However, under the ASX listing rules, the aggregate non-executive directors' remuneration (i.e. excluding the Managing Director
and executive directors, if any) for a financial year must not exceed the amount fixed by the Company in general meeting. This
amount has been fixed at $750,000 per annum. Any changes to the aggregate remuneration will be put to a general meeting where
the shareholders will be asked to approve a maximum annual aggregate remuneration.
The annual base non-executive director fees paid by the Company are $129,920 per annum (2023: $131,808) for the chairman and
$83,149 per annum (2023: $84,367) for other non-executive directors. An additional fee of $12,644 per annum (2023: $12,644) has
been paid to the chairman of each Board committee. Directors may also be reimbursed for all travelling and other expenses incurred
in connection with their Company duties. Total annual fees payable to non-executive directors for FY2024 is $366,501 (FY2023:
$313,185).
Executive director remuneration
Fees and payments to executive directors reflect the demands and responsibilities of their role. Executive directors' fees and
payments are reviewed annually by the Remuneration and Nominations Committee.
Executive remuneration
The Group aims to reward executives based on their position and responsibilities, with a level and mix of remuneration which has
both fixed and variable components. The executive remuneration framework includes the following components:
Fixed remuneration – comprising base salary, superannuation contributions and other benefits, having regard to
comparable market benchmarks. Executives may receive their fixed remuneration in the form of cash or other fringe
benefits (for example motor vehicle benefits) where it does not create any additional costs to the Group and provides
additional value to the executive;
12
Directors’ report
30 June 2024
Remuneration report (audited) (continued)
Short-term incentive (“STI”) program – an ‘at risk’ component of remuneration where, if individual, business unit and
Group performance measures are met, senior executives will be awarded cash bonuses equal to a percentage of their
fixed remuneration. Performance measures include a financial gateway hurdle and non-financial key performance
indicators (“KPIs”). The percentage of fixed remuneration received is capped, but may vary, between individuals and
depending on the level of performance achieved; and
Long-term incentive (“LTI”) program – an ‘at risk’ component of remuneration where senior executives are awarded rights
which are subject to a total shareholder return (“TSR”) performance condition and a service condition. The number of
rights to be awarded will be determined by the Board having regard to the overall amount of executive remuneration and
the annual profit impact of the rights awarded.
The combination of these comprises an executive's total remuneration. The Board believes this remuneration framework ensures
that remuneration outcomes link to Company performance and the long-term interests of Shareholders.
2024 STI Program
During FY2024, senior executives’ entitlement to an STI was based on achievement of agreed performance objectives including:
Financial performance;
Operational performance;
Strategy and innovative initiatives;
Workplace health and safety; and
Stakeholder satisfaction.
Actual performance criteria varied between executives, having regard to their roles and responsibilities.
The Board applies the following general principles when determining and measuring performance targets and any STI incentive:
STI Pool
The size of the STI pool is determined by the Board, upon advice from the Remuneration and Nominations
Committee, having regard to individual employment contracts. In consultation with the Remuneration and
Nominations Committee, the Board assesses the Group’s financial performance and the performance of key
management personnel against agreed performance objectives.
Structure
The STI available is split between the achievement of financial gateway hurdles (at a group and/or individual
operating entity level) and non-financial KPIs. The proportion of the STI between financial and non-financial
varies between key management personnel.
The financial gateway hurdles are based on Operating EBITDA which the Board believes is an acceptable proxy
for overall operating performance. Operating EBITDA is calculated by adjusting Reported EBITDA for the impact
of the adoption of AASB 16 Leases and non-operational related items.
Achievement
The achievement of financial and non-financial KPIs vary between key management personnel. The Board
retains discretion in relation to the impact that non-recurring or unusual items may have on achievement of the
STIs.
The actual amount received by key management personnel, as a result of achieving the pre-determined financial hurdles and non-
financial KPIs, are listed in the remuneration tables below.
2024 LTI Program
Rights may be granted under the Employee Equity Plan (“EEP”) which was adopted on 3 November 2021. Each right entitles the
participant to receive one ordinary share in the Company on exercising. The specific terms relevant to the grant of rights are set
out in an offer from the Company to the Eligible Person which contains details of the application price (which must not be for more
than nominal consideration), the expiry date, the exercise price, the vesting date, any applicable performance conditions and other
specific terms relevant to those options.
13
Directors’ report
30 June 2024
Remuneration report (audited) (continued)
During FY2024, 2,270,000 rights were granted to senior executives, including 700,000 issued to certain key management
personnel, pursuant to the EEP on the specific key terms:
The Vesting Date of the options is 30 September 2026, subject to meeting the Performance Conditions.
The Performance Period for the Performance Conditions is the period from the Grant Date until the Vesting Date
(inclusive of each of those dates).
The performance conditions were as follows:
1) Total Shareholder Return (“TSR”) condition – the Compound Annual Growth Rate (“CAGR”) in the Company’s Total Shareholder
Return will be tested on the Vesting Date and the Rights will vest in accordance with the following TSR CAGR hurdles:
TSR CAGR
% of Rights to vest
Less than 7%
0%
At least 7% but less than 10% p.a.
50%
At least 10% but less than 15% p.a.
70% to 100% on a straight-line basis
At least 15% p.a.
100%
TSR CAGR means the TSR compound annual growth rate as against the Base VWAP.
TSR means the total shareholder return to a shareholder of the Company, inclusive of Share Price Appreciation,
capital returns and dividends.
Share Price Appreciation means the difference between the Base VWAP and Vesting VWAP.
Base VWAP means the volume weighted average price of Shares over the 10 Trading Days (as that term is defined in
the Listing Rules) immediately before and 10 Trading Days immediately after the release of the Company’s 2023
financial report. The 2023 financial report was released on 29 August 2023 and the Base VWAP has been calculated
at $0.65.
Vesting VWAP means the volume weighted average price of Shares over the 10 Trading Days (as that term is defined
in the Listing Rules) immediately before and 10 Trading Days immediately after the release of the Company’s 2026
financial report, expected to be on or about 31 August 2026.
2) Service condition – continuous employment of the employee with NTAW Holdings or one of its subsidiaries from the Grant
Date until the Vesting Date.
The Expiry Date of the rights was 30 September 2028, which is two years after the Vesting Date, if not lapsed earlier.
If the Performance Conditions are not met before the end of the Performance Period, the options will lapse.
(b) Details of remuneration
The key management personnel of the Group in FY2024 consisted of the following directors of NTAW Holdings Limited:
Murray Boyte – Independent Non-Executive Chairman
Peter Ludemann – Managing Director and Chief Executive Officer
Terry Smith – Non-Executive Director
Bill Cook – Independent Non-Executive Director (ceased 27 February 2024)
Robert Kent – Executive Director (ceased 28 January 2024)
Kenneth Gunderson-Briggs – Independent Non-Executive Director (appointed 13 December 2023)
Christopher Hummer – Executive Director (appointed 13 December 2023)
Tynan Young – Independent Non-Executive Director (appointed 30 January 2024)
And the following persons:
Jason Lamb – Chief Financial Officer and Joint Company Secretary
14
Directors’ report
30 June 2024
Remuneration report (audited) (continued)
Amounts of remuneration
Details of the remuneration of key management personnel of the Group are set out in the following tables.
Short-term benefits3
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
Cash
Other2
Super-
Long service
Equity-
and fees1
Bonus
annuation
leave
settled
Total
$
$
$
$
$
$
$
2024
Non-Executive Directors:
M Boyte
117,045
-
-
12,875
-
-
129,920
T Smith
74,909
-
-
8,240
-
-
83,149
W Cook
57,651
-
-
6,342
-
-
63,993
K Gunderson-Briggs
54,347
-
-
-
-
-
54,347
T Young
35,092
-
-
-
-
-
35,092
Executive Directors:
P Ludemann
612,565
201,604
-
27,500
9,979
157,252
1,008,900
R Kent
50,859
-
126,000
5,594
-
-
182,453
C Hummer4
198,105
78,363
-
14,808
3,483
33,596
328,355
Other Key Management Personnel:
J Lamb
392,604
149,169
-
27,500
2,852
94,150
666,275
1,593,177
429,136
126,000
102,859
16,314
284,998
2,552,484
1 Including movement in annual leave provisions.
2 The Group engaged in consulting services by R Kent in FY2024.
3 There were no non-monetary benefits paid during FY2024.
4 Remuneration details for period of FY2024 C Hummer was a KMP.
Short-term benefits3
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
Cash
Other2
Super-
Long service
Equity-
Total
and fees1
bonus
annuation
leave
settled
$
$
$
$
$
$
$
2023
Non-Executive Directors:
M Boyte
119,283
-
-
12,525
-
-
131,808
T Smith
76,350
-
-
8,017
-
-
84,367
W Cook
87,792
-
-
9,218
-
-
97,010
Executive Directors:
P Ludemann
678,863
-
-
25,385
30,804
130,510
865,562
R Kent
87,792
-
102,773
9,218
-
-
199,783
Other Key Management Personnel:
J Lamb
403,041
20,000
-
25,439
32,909
78,475
559,864
1,453,121
20,000
102,773
89,802
63,713
208,985
1,938,394
1 Including movement in annual leave provisions.
2 The Group engaged in consulting services by R Kent in FY2023.
3 There were no non-monetary benefits paid during FY2023.
15
Directors’ report
30 June 2024
Remuneration report (audited) (continued)
The relative proportion of the total remuneration opportunity of key management personnel of the Group is as follows:
Fixed
remuneration
At risk - STI
At risk - LTI
Name
2024
2023
2024
2023
2024
2023
Non-Executive Directors:
M Boyte
100%
100%
-
-
-
-
T Smith
100%
100%
-
-
-
-
W Cook
100%
100%
-
-
-
-
K Gunderson-Briggs
100%
-
-
-
-
-
T Young
100%
-
-
-
-
-
Executive Directors:
P Ludemann
57%
59%
29%
29%
14%
12%
R Kent
100%
100%
-
-
-
-
C Hummer1
63%
-
28%
-
9%
-
Other Key Management Personnel:
J Lamb
60%
61%
27%
27%
13%
12%
Cash bonus
paid/payable
Cash bonus forfeited2
Name
2024
2023
2024
2023
Executive Director:
P Ludemann
62%
-
38%
100%
C Hummer1
49%
-
51%
-
Other Key Management Personnel:
J Lamb
77%
11%
23%
89%
1 C Hummer’s FY2023 fixed and at risk remuneration not disclosed as was not a KMP member during that year.
2 Forfeited cash bonuses are not accrued in the relevant year’s result.
(c) Relationship between remuneration and Company performance
The table below summarises the Group’s performance and correlates it to the total key management personnel remuneration
for the financial year:
Metric
FY2024
FY2023
FY2022
FY2021
FY2020
Sales revenue ($’000)
533,431
582,284
555,549
461,533
158,857
NPAT attributable to shareholders ($’000)
1,563
3,331
9,398
20,255
4,551
Operating EBITDA ($’000)
42,343
38,828
44,882
46,677
11,786
Share price at end of year ($)
0.42
0.57
0.97
1.06
0.38
Basic earnings per share (cents)
1.17
2.51
7.65
17.90
4.12
Dividends paid (cents per share)
-
-
4.50
8.00
1.25
16
Directors’ report
30 June 2024
Remuneration report (audited) (continued)
(d) Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements with no
fixed tenure requirements. Details of these agreements for FY2024 were as follows:
Name:
Peter Ludemann
Title:
Managing Director and Chief Executive Officer
Details:
Mr Ludemann has an annual total fixed remuneration (TFR) of $646,123 consisting of
base salary, superannuation and car allowance. Under the terms of his employment
contract, he is eligible to receive short term incentives (STI) with a maximum
opportunity of 50% of TFR per annum (at maximum performance levels). The STI will
be in the form of an annual cash bonus, subject to the achievement of key
performance indicators as determined by the Board. Subject to shareholder approval,
Mr Ludemann will also be awarded long term incentives (LTI) under NTAW Holdings
Employee Equity Plan. He has statutory leave entitlements and is entitled to 5 weeks
annual leave per year. Either party may terminate the contract on 6 months’ notice.
In the case of termination by NTAW Holdings, NTAW Holdings may provide payment
in lieu of notice. Mr Ludemann’s employment contract does not contain any express
redundancy provisions. Mr Ludemann’s contract contains a 5 year non-compete
restraint within Australia and New Zealand and a 12-month non-solicitation of
employees, contractors and clients who deal with NTAW Holdings.
Name:
Jason Lamb
Title:
Chief Financial Officer and joint Company Secretary
Details:
Mr Lamb has an annual total fixed remuneration (TFR) of $429,940, consisting of
base salary and superannuation. Under the terms of his employment contract, he is
eligible to receive short term incentives (STI) with a maximum opportunity of 45% of
TFR per annum (at maximum performance levels). The STI will be in the form of an
annual cash bonus, subject to the achievement of key performance indicators as
determined by the Board. Mr Lamb will also be awarded long term incentives (LTI)
under NTAW Holdings Employee Equity Plan. He is eligible for short term incentives
as determined by the Board. Mr Lamb has statutory leave entitlements. Either party
may terminate the contract on 6 months’ notice. In the case of termination by
NTAW Holdings, NTAW Holdings may provide payment in lieu of notice. He is
entitled to redundancy pay in accordance with NTAW Holdings legal obligations. Mr
Lamb’s contract contains a 6 month non-compete restraint within Australia and a 6-
month non-solicitation of employees, contacts and clients with whom he has contact
with, or influence over.
17
Directors’ report
30 June 2024
Remuneration report (audited) (continued)
Name:
Christopher Hummer
Title:
Executive Director and DWC Managing Director
Details:
Mr Hummer has an annual total fixed remuneration (TFR) of $370,661 ($239,707
since 13 December 2023), consisting of base salary, motor vehicle allowance and
superannuation. Under the terms of his employment contract, he is eligible to
receive short term incentives (STI) with a maximum opportunity of 45% of TFR per
annum (at maximum performance levels). The STI will be in the form of an annual
cash bonus, subject to the achievement of key performance indicators as
determined by the Board. Mr Hummer will also be awarded long term incentives
(LTI) under NTAW Holdings Employee Equity Plan. He is eligible for short term
incentives as determined by the Board. Mr Hummer has statutory leave
entitlements. Either party may terminate the contract on 6 months’ notice. In the
case of termination by NTAW Holdings, NTAW Holdings may provide payment in
lieu of notice. He is entitled to redundancy pay in accordance with NTAW Holdings
legal obligations. Mr Hummer’s contract contains a 6 month non-compete restraint
within Australia and a 6-month non-solicitation of employees, contacts and clients
with whom he has contact with, or influence over.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct
All key management personnel are required to keep information obtained during their employment confidential, both during
their employment and after their employment ends. Employment contracts contains an assignment of intellectual property
created during the course of their employment.
(e) Share-based compensation
On 13 October 2023, 700,000 rights were issued to key management personnel. These rights have a vesting date of 30
September 2026 and an expiry date of 30 September 2028. The rights have a $nil exercise price and the fair value at grant date
per right was $0.5148.
The rights have the following conditions:
1.
Performance conditions were as follows:
Total shareholder return (“TSR”) condition – the Compound Annual Growth Rate (“CAGR”) in the Company’s Total
Shareholder Return will be tested on the Vesting Date and the Rights will vest in accordance with the following TSR
CAGR hurdles:
TSR CAGR
% of Rights to vest
Less than 7%
0%
At least 7% but less than 10% p.a.
50%
At least 10% but less than 15% p.a.
70% to 100% on a straight-line basis
At least 15% p.a.
100%
TSR CAGR means the TSR compound annual growth rate as against the Base VWAP.
TSR means the total shareholder return to a shareholder of the Company, inclusive of Share Price Appreciation,
capital returns and dividends.
Share Price Appreciation means the difference between the Base VWAP and Vesting VWAP.
Base VWAP means the volume weighted average price of Shares over the 10 Trading Days (as that term is defined in
the Listing Rules) immediately before and 10 Trading Days immediately after the release of the Company’s 2023
financial report. The 2023 financial report was released on 29 August 2023 and the Base VWAP has been calculated
at $0.65.
Vesting VWAP means the volume weighted average price of Shares over the 10 Trading Days (as that term is defined
in the Listing Rules) immediately before and 10 Trading Days immediately after the release of the Company’s 2026
financial report, expected to be on or about 31 August 2026.
18
Directors’ report
30 June 2024
Remuneration report (audited) (continued)
2.
Service condition – continuous employment of the employee with NTAW Holdings or one of its subsidiaries from the
Grant Date until the Vesting Date.
The Expiry Date of the rights was 30 September 2028, which is two years after the Vesting Date, if not
lapsed earlier.
If the Performance Conditions are not met before the end of the Performance Period, the options will lapse.
(f) Equity instruments held by key management personnel
Shareholding
The number of shares in the Company held during the financial year by each director and other members of key management
personnel of the Group, including their personally related parties, is set out below:
Balance at
Balance on
Additions -
Additions -
Additions /
Balance at
the start of
(resignation)/
Share
Dividend
(Disposals) -
the end of
the year
Appointment
Purchase
Reinvestment
On-market
the year
Plan
Plan (“DRP”)
Ordinary shares
M Boyte
245,211
-
-
-
-
245,211
T Smith
27,891,171
-
-
-
-
27,891,171
B Cook
460,427
(460,427)
-
-
-
-
R Kent
331,500
(331,500)
-
-
-
-
K Gunderson-Briggs
-
-
-
-
-
-
C Hummer
-
2,387,488
-
-
-
2,387,488
T Young
-
7,460,609
-
-
7,460,609
P Ludemann
2,817,425
-
-
-
-
2,817,425
J Lamb
75,418
-
-
-
-
75,418
31,821,152
9,056,170
-
-
-
40,877,322
Options
The number of options over ordinary shares in the Company held during the financial year by each director and other members
of key management personnel of the Group, including their personally related parties, is set out below:
Balance at
Balance on
Balance at
the start of
(resignation)/
Granted /
the end of
the year
Appointment
Lapsed
Exercised
the year
Options
M Boyte
-
-
-
-
-
T Smith
-
-
-
-
-
B Cook
-
-
-
-
-
R Kent
-
-
-
-
-
K Gunderson-Briggs
-
-
-
-
-
C Hummer
-
-
-
-
-
T Young
-
-
-
-
-
P Ludemann1
350,000
-
-
-
350,000
J Lamb2
320,000
-
-
-
320,000
670,000
-
-
-
670,000
1
On 30 September 2022, 180,000 options which were granted on 8 November 2019 had vested. On 30 September 2023, 170,000 options which were granted on 25 February 2021 had vested.
All options remain exercisable at 30 June 2024 and at the date of this report.
19
20
Directors’ report
30 June 2024
Remuneration report (audited) (continued)
Rights
The number of Rights to ordinary shares in the Company held during the financial year by each director and other members of
key management personnel of the Group, including their personally related parties, is set out below:
Balance at
Balance on
Balance at
the start of
(resignation)/
Granted /
the end of
the year
Appointment
Lapsed
Exercised
the year
Rights
M Boyte
-
-
-
-
-
T Smith
-
-
-
-
-
B Cook
-
-
-
-
-
R Kent
-
-
-
-
-
K Gunderson-Briggs
-
-
-
-
-
C Hummer
-
225,721
-
-
225,721
T Young
-
-
-
-
-
P Ludemann
228,590
-
400,000
-
628,590
J Lamb
114,295
-
300,000
-
414,295
342,885
225,721
700,000
-
1,268,606
All Rights on issue remain unvested as at 30 June 2024.
(g) Other transactions with key management personnel
Related party transactions
During the reporting period, the Group leased business premises from a KMP member. The lease expires on 28 February 2026
with no renewal options. Rent payments for FY2024 totalled $299,569 (2023: $276,276), with a lease liability of $503,859
outstanding at 30 June 2024 (2023: $443,789).
The Group also engaged in consulting services of $126,000 from a KMP member which has been included as a short term benefit
in section (b) above (2023: $102,773).
Loans to/from key management personnel
At 30 June 2024 and 30 June 2023, there were no loans to and/or from KMP.
(h) Non-binding vote adoption by shareholders at the 2023 Annual General Meeting
No comments were made and considered on the remuneration report for the financial year ended 30 June 2023 (prior financial
year) at the Company’s 2023 Annual General Meeting.
A resolution that the remuneration report for the financial year ended 30 June 2023 be adopted was put to a vote at the
Company’s 2023 Annual General Meeting and 99.1% of votes cast were in favour of the adoption of that remuneration report.
This concludes the Remuneration Report, which has been audited.
21
Directors’ report 30 June 2024
21
Shares under option
There were 2,110,000 unissued ordinary shares of NTAW Holdings Limited under option outstanding at the date of this report.
These options were issued in three tranches with 720,000, 1,310,000 and 80,000 options outstanding, respectively; have an exercise
price of $0.3735, $0.5745 and $0.5745, respectively; were granted on 08/11/2019, 25/02/2021 and 24/09/2021, respectively; and
expire on 07/11/2024, 30/09/2025 and 30/09/2025, respectively. The option holders have no right to participate in any share issue
prior to exercising the options.
On 13 October 2023, 2,270,000 rights were granted to senior executives where rights were granted to the Group’s most highly
remunerated officers being Peter Ludemann, Jason Lamb and Christopher Hummer (refer to note 26 for compensation details).
At the date of this report, there were 2,703,781 unquoted rights to unissued ordinary shares of NTAW Holdings Limited
outstanding. These rights were issued in two tranches with 853,781 (grant date 17/12/2021) and 1,850,000 (grant date
13/10/2023) rights outstanding, respectively, both tranches have a nil exercise price and expire on 30/09/2026 and 30/9/2028,
respectively.
Shares issued on the exercise of options
During the year and in accordance with their terms, 915,000 options with an expiry date of 30 September 2024 were exercised
(grant date 08/11/2019). As a result, 627,500 of the 915,000 options were net settled for 336,079 ordinary shares (exercised
between 20/09/2023 and 03/10/2023) and the remaining 287,500 options were exercised at $0.3735 per ordinary share with a
total consideration of $107,382 and 287,500 ordinary shares issued (exercised between 21/09/2023 and 11/10/2023).
Also during the year and in accordance with their terms, 300,000 options with an expiry date of 30 September 2025 were
exercised (220,000 options grant date 25/02/2021; 80,000 options grant date 24/09/2021). As a result, 220,000 options were
exercised at $0.5745 per ordinary share with a total consideration of $126,390 and 220,000 ordinary shares issued (exercise date
11/10/2023) and the remaining 80,000 options were net settled for 21,197 ordinary shares (exercise date 10/10/2023).
There were no amounts unpaid in relation to shares issued as a result of the exercise of options.
Indemnity and insurance of officers
The Company has indemnified the directors and executives of the Group for costs incurred, in their capacity as a director or
executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the directors and executives of the Group
against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature
of the liability and the amount of the premium.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the Group
or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company or
any related entity.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the
Group, or to intervene in any proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the
Group for all or part of those proceedings.
Directors’ report
30 June 2023
22
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are
outlined in note 30 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another person
or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the Corporations
Act 2001.
The directors are of the opinion that the services as disclosed in note 30 to the financial statements do not compromise the external
auditor's independence requirements of the Corporations Act 2001 for the following reasons:
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity
of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of
Ethics for Professional Accountants (including Independence Standards) issued by the Accounting Professional and Ethical
Standards Board, including reviewing or auditing the auditor's own work, acting in a management or decision-making
capacity for the Group, acting as advocate for the Group or jointly sharing economic risks and rewards.
Officers of the Company who are former partners of Pitcher Partners
There are no officers of the Company who are former partners of Pitcher Partners.
Rounding of amounts
The Group is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments
Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations
Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this directors' report.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
_____________________
Murray Boyte
Chairman
27 August 2024
Brisbane
23
Level 38, 345 Queen Street
Brisbane, QLD 4000
Postal address
GPO Box 1144
Brisbane, QLD 4001
+61 7 3222 8444
pitcher.com.au
Nigel Fischer
Mark Nicholson
Peter Camenzuli
Jason Evans
Kylie Lamprecht
Norman Thurecht
Brett Headrick
Warwick Face
Cole Wilkinson
Simon Chun
Jeremy Jones
Tom Splatt
James Field
Daniel Colwell
Robyn Cooper
Felicity Crimston
Cheryl Mason
Kieran Wallis
Murray Graham
Andrew Robin
Karen Levine
Edward Fletcher
Robert Hughes
Ventura Caso
Tracey Norris
Pitcher Partners is an association of independent firms. An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme approved under Professional
Standards Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.
Adelaide | Brisbane | Melbourne | Newcastle | Perth | Sydney
The Directors
NTAW Holdings Limited
Level 2, 385 MacArthur Avenue
HAMILTON QLD 4007
Auditor’s Independence Declaration
In relation to the independent audit for the year ended 30 June 2024, to the best of my knowledge and belief
there have been:
(i)
No contraventions of the auditor independence requirements of the Corporations Act 2001; and
(ii)
No contraventions of APES 110 Code of Ethics for Professional Accountants (including
Independence Standards).
This declaration is in respect of NTAW Holdings Limited and the entities it controlled during the year.
PITCHER PARTNERS
ANDREW ROBIN
Partner
Brisbane, Queensland
27 August 2024
23
Consolidated statement of profit or loss and other comprehensive income
for the year ended 30 June 2024
Note
2024
2023
$'000
$'000
Revenue from contracts with customers
5
533,431
582,284
Other income
6
1,982
370
Expenses
Cost of goods sold
(364,992)
(418,463)
Employee benefits and other related costs
(86,237)
(84,407)
Depreciation and amortisation
7
(25,770)
(24,040)
Occupancy
(7,425)
(7,763)
Computer and software costs
(7,151)
(6,705)
Motor vehicle costs
(5,617)
(6,686)
Marketing
(5,259)
(5,187)
Insurance
(4,383)
(4,104)
Professional fees and acquisition costs
(2,166)
(2,137)
Other
(11,905)
(10,885)
Finance costs
7
(11,099)
(8,422)
Profit before income tax expense
3,409
3,855
Income tax expense
8
(2,167)
(960)
Profit after income tax expense
1,242
2,895
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation
(105)
305
Other comprehensive income for the year, net of tax
(105)
305
Total comprehensive income for the year
1,137
3,200
Profit for the year is attributable to:
Non-controlling interest
(321)
(436)
Owners of NTAW Holdings Limited
1,563
3,331.
1,242
2,895
Total comprehensive income for the year is attributable to:
Non-controlling interest
(321)
(436)
Owners of NTAW Holdings Limited
1,458
3,636
1,137.
3,200.
Cents
Cents
Basic earnings per share
25
1.17
2.51
Diluted earnings per share
25
1.13
2.42
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
24
Consolidated statement of financial position
as at 30 June 2024
Note
2024
2023
$'000
$'000
Assets
Current assets
Cash and cash equivalents
9
38,886
33,040
Trade and other receivables
10
74,440
76,743
Inventories
11
149,581
129,788
Other financial assets
12
1,577
1,279
Forward foreign exchange contract asset
-
271
Prepayments
3,595
4,111
Total current assets
268,079
245,232
Non-current assets
Property, plant and equipment
13
16,965
16,791
Right-of-use assets
14
79,260
61,216
Intangible assets
15
48,054
51,265
Other financial assets
12
739
1,543
Total non-current assets
145,018
130,815
Total assets
413,097
376,047
Liabilities
Current liabilities
Trade and other payables
16
103,630
83,055
Borrowings
17
5,180
4,961
Lease liabilities
18
18,510
15,902
Provisions
19
10,262
11,339
Forward foreign exchange contract liability
157
-
Current tax liability
180
129
Total current liabilities
137,919
115,386
Non-current liabilities
Borrowings
17
85,884
88,285
Lease liabilities
18
67,973
51,000
Provisions
19
2,233
2,250
Deferred tax
8
1,792
3,786
Total non-current liabilities
157,882
145,321
Total liabilities
295,801
260,707
Net assets
117,296
115,340
Equity
Issued capital
20
94,569
94,068
Reserves
21
(880)
(1,093)
Retained earnings
20,854
19,291
Equity attributable to the owners of NTAW Holdings Limited
114,543
112,266
Non-controlling interest
2,753
3,074
Total equity
117,296
115,340
The above statement of financial position should be read in conjunction with the accompanying notes
25
Consolidated statement of changes in equity
for the year ended 30 June 2024
Issued
Foreign
currency
translation
Share-based
payments
Retained
Non-
controlling
Total equity
capital
reserve
reserve
earnings
interest
$'000
$'000
$'000
$'000
$'000
$'000
Balance at 1 July 2022
93,122
(3,027)
920
17,941
3,510
112,466
Profit after income tax expense for
the year
-
-
-
3,331
(436)
2,895
Other comprehensive income for
the year, net of tax
-
305
-
-
-
305
Total comprehensive income for
the year
-
305
-
3,331
(436)
3,200
Transactions with owners in their
capacity as owners:
Redemption of share options (note
20)
20
-
(20)
-
-
-
Share-based payments (note 24)
-
-
729
-
-
729
Dividends paid (note 22)
926
-
-
(1,981)
-
(1,055)
Balance at 30 June 2023
94,068
(2,722)
1,629
19,291
3,074
115,340
Balance at 1 July 2023
94,068
(2,722)
1,629
19,291
3,074
115,340
Profit after income tax expense for
the year
-
-
-
1,563
(321)
1,242
Other comprehensive income for
the year, net of tax
-
(106)
-
-
-
(106)
Total comprehensive income for
the year
-
(106)
-
1,563
(321)
1,136
Transactions with owners in their
capacity as owners:
Redemption of share options (note
20)
501
-
(267)
-
-
234
Share-based payments (note 24)
-
-
586
-
-
586
Dividends paid (note 22)
-
-
-
-
-
-
Balance at 30 June 2024
94,569
(2,828)
1,948
20,854
2,753
117,296
The above statement of changes in equity should be read in conjunction with the accompanying notes
26
Consolidated statement of cash flows
for the year ended 30 June 2024
Note
2024
2023
$'000
$'000
Cash flows from operating activities
Receipts from customers
599,112
656,716
Payments to suppliers and employees
(553,128)
(622,900)
45,984
33,816
Interest received
292
43
Interest and other finance costs paid
(6,945)
(6,067)
Income taxes paid
(4,108)
(1,515)
Net cash from operating activities
23
35,223
26,277
Cash flows from investing activities
Payment of deferred consideration
(2,600)
(2,600)
Payments for property, plant and equipment
(4,649)
(4,110)
Proceeds from disposal of property, plant and equipment
1,148
687
Transfers to term deposits
(16)
(226)
Net cash used in investing activities
(6,117)
(6,249)
Cash flows from financing activities
Proceeds from share issue
234.
-.
Proceeds from borrowings
-
4,292
Repayment of borrowings
(2,601)
(4,500)
Payment of principal and interest on lease liabilities
(21,133)
(18,879)
Dividends paid
-
(1,055)
Net cash used in financing activities
(23,500)
(20,142)
Net increase/(decrease) in cash and cash equivalents
5,606
(114)
Cash and cash equivalents at the beginning of the financial year
32,579
32,776
Effects of exchange rate changes on cash and cash equivalents
21
(83)
Cash and cash equivalents at the end of the financial year
9
38,206
32,579
27
28
Notes to the financial statements
30 June 2024
Note 1. General information
29
Note 2. Material accounting policy information
29
Note 3. Critical accounting judgements, estimates and assumptions
35
Note 4. Operating segments
37
Note 5. Revenue from contracts with customers
37
Note 6. Other income
37
Note 7. Expenses
38
Note 8. Income tax
39
Note 9. Cash and cash equivalents
40
Note 10. Trade and other receivables
40
Note 11. Inventories
40
Note 12. Other financial assets
41
Note 13. Property, plant and equipment
41
Note 14. Right-of-use assets
42
Note 15. Intangible assets
43
Note 16. Trade and other payables
46
Note 17. Borrowings
46
Note 18. Lease liabilities
48
Note 19. Provisions
49
Note 20. Issued capital
50
Note 21. Reserves
51
Note 22. Dividends
51
Note 23. Cash flow information
52
Note 24. Share-based payments
53
Note 25. Earnings per share
58
Note 26. Key management personnel disclosures
58
Note 27. Related party transactions
59
Note 28. Financial instruments
61
Note 29. Fair value measurement
65
Note 30. Remuneration of auditors
66
Note 31. Contingent liabilities
66
Note 32. Interests in subsidiaries
67
Note 33. Parent entity information
68
Note 34. Deed of cross guarantee
69
Note 35. Events after the reporting period
72
29
Notes to the financial statements
30 June 2024
Note 1. General information
The financial statements cover NTAW Holdings Limited as a Group consisting of NTAW Holdings Limited (“Company”, “NTAW
Holdings” or “Parent Entity”) and the entities it controlled at the end of, or during, the year (“Group”). The financial statements are
presented in Australian Dollars (“AUD”), which is NTAW Holdings Limited's functional and presentation currency.
NTAW Holdings Limited is a for-profit listed public company limited by shares, incorporated and domiciled in Australia. Its registered
office and principal place of business is:
Level 2, 385 MacArthur Avenue
Hamilton QLD 4007
A description of the nature of the Group's operations and its principal activities are included in the directors' report, which is not
part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 27 August 2024. The directors
have the power to amend and reissue the financial statements.
Note 2. Material accounting policy information
The material accounting policies adopted in the preparation of the financial statements are set out below. These policies have been
consistently applied to all the years presented, unless otherwise stated.
Basis of preparation
These general-purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board (“AASB”) and the Corporations Act 2001, as appropriate for
for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by
the International Accounting Standards Board (“IASB”).
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the revaluation of
financial assets and liabilities at fair value through profit or loss and derivative financial instruments.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in
note 3.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting
Standards Board that are mandatory for the current reporting period. The new accounting standards, interpretations and
amendments that are relevant to the activities of the Group have not had a material impact on the financial statements of the
Group.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only. Supplementary
information about the parent entity is disclosed in note 33.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of NTAW Holdings Limited as at 30
June 2024 and the results of all subsidiaries for the year then ended.
30
Notes to the financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated. Unrealised
losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies
of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and other
comprehensive income, statement of financial position and statement of changes in equity of the Group. Losses incurred by the
Group are attributed to the non-controlling interest in full, even if that results in a deficit balance.
Foreign currency translation
Foreign currency transactions
Foreign currency transactions are translated into Australian Dollars 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
financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or
loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian Dollars using the exchange rates at the reporting date.
The revenues and expenses of foreign operations are translated into Australian Dollars using the average exchange rates, which
approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are recognised in
other comprehensive income through the foreign currency translation reserve in equity.
The foreign currency translation reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Net investment in foreign operations
The loans between the Australian and New Zealand entities are denominated in New Zealand Dollars. These loans are translated
into Australian Dollars using the exchange rates at the reporting date. The resulting foreign exchange differences are recognised
through the foreign currency translation reserve in equity.
Revenue recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange for
transferring goods or services to a customer. For each contract with a customer, the Group: identifies the contract with a customer;
identifies the performance obligations in the contract; determines the transaction price which takes into account estimates of
variable consideration and the time value of money; allocates the transaction price to the separate performance obligations on the
basis of the relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when or as
each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts, rebates
and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates are determined
using either the 'expected value' or 'most likely amount' method. The measurement of variable consideration is subject to a
constraining principle whereby revenue will only be recognised to the extent that it is highly probable that a significant reversal in
the amount of cumulative revenue recognised will not occur. The measurement constraint continues until the uncertainty
associated with the variable consideration is subsequently resolved. Amounts received that are subject to the constraining principle
are recognised as a refund liability.
Customer rebates are offered to certain customers based on agreed upon volume targets and time periods to achieve those
targets. Customer rebates are accrued at reporting date based on progress against these agreed targets and the Group’s
expectation of customers meeting or exceeding these volume targets throughout the rebate period, and are recorded against the
customer’s receivables account.
31
Notes to the financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods, which is generally
at the time of delivery. There is significant integration between sales of goods and services revenue where the performance
obligations are satisfied together.
Services revenue
Revenue from services performed is recognised when the services are rendered. No services performed include multiple
deliverables.
Warranty obligations
Provisions for warranty obligations are measured at the Group’s estimate of the expenditure required to fulfil its warranty
obligations at the reporting date.
Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income
tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences,
unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets
are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor
taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the
timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable
future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets
recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying
amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there are
future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against current
tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the
same taxable entity or different taxable entities which intend to settle simultaneously.
NTAW Holdings Limited (the 'head entity') and its wholly owned Australian subsidiaries (National Tyre & Wheel Pty Ltd, Dynamic
Wheel Co. Pty Limited, ACN 117 639 040 Pty Ltd (formerly “Integrated OE Pty Ltd”), Statewide Tyre Distribution Pty Ltd, ACN 642
540 690 Pty Ltd (formerly ”Tyres4U Pty Ltd”), Tyreright Operation Pty Ltd, Black Rubber Pty Ltd, Black Rubber Sydney Pty Ltd, Solid
Plus Operations Pty and NTAW Logistics Pty Ltd), have formed an income tax consolidated group under the tax consolidation
regime. NTAW Holdings (NZ) Ltd (the ‘head entity’) and its wholly owned New Zealand subsidiaries (Exclusive Tyres Distributors
(NZ) Limited, Tyres4U (NZ) Ltd, Carters Tyre Service Limited, C.O. Tire & Retreading Co Limited and Tyre Distributors New Zealand
Limited) have formed an income tax consolidated group under the tax consolidation regime. In both consolidated income tax
groups, the head entity and subsidiary in the tax consolidated group continue to account for their own current and deferred tax
amounts. The tax consolidated group has applied the 'separate taxpayer within group' approach in determining the appropriate
amount of taxes to allocate to members of the tax consolidated group.
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or assets) and
the deferred tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax consolidated
group.
32
Notes to the financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable
from or payable to other entities in the tax consolidated group. The tax funding arrangement ensures that the intercompany charge
equals the current tax liability or benefit of each tax consolidated group member, resulting in neither a contribution by the head
entity to the subsidiaries nor a distribution by the subsidiaries to the head entity.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value. For the statement of cash flows presentation purposes, cash and cash equivalents
also includes bank overdrafts, which are shown within borrowings in current liabilities on the statement of financial position.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest
method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30 days.
The Group has applied the simplified approach under AASB 9 Financial Instruments to measuring expected credit losses, which uses
a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days
overdue.
Expected credit losses are based on a review of receivable balances and identification of specific debtors, based on historical credit
loss experience, and adjusted for factors that are specific to the receivable balance, as well as current and forward-looking economic
conditions affecting the ability of the customers to settle the receivables.
Inventories
Finished goods are stated at the lower of cost and net realisable value on a 'first in first out' basis. Cost comprises of purchase and
delivery costs, net of rebates and discounts received or receivable.
Stock in transit is stated at the lower of cost and net realisable value. Cost comprises of purchase and delivery costs, net of rebates
and discounts received or receivable.
Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure
that is directly attributable to the acquisition of the items.
Depreciation is calculated on a diminishing value basis to write off the net cost of each item of property, plant and equipment over
their expected useful lives as follows:
Leasehold improvements
2.5% to 15%
Plant and equipment
5% to 60%
Motor vehicles
13.5% to 30%
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
Leasehold improvements are depreciated over the shorter of the unexpired period of the lease or the estimated useful life of the
assets.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the Group.
Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
33
Notes to the financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises
the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date
net of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an
estimate of costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of
the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of the lease term,
the depreciation is over its estimated useful life. Right-of-use assets are subject to impairment or adjusted for any remeasurement
of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12
months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.
Lease liabilities
Lease liabilities are recognised at the commencement date of a lease. The lease liability is initially recognised at the present value
of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate
cannot be readily determined, the Group's incremental borrowing rate. Lease payments comprise of fixed payments less any lease
incentives receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value
guarantees, exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated
termination penalties.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there
is a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term;
certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the
corresponding right-of-use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at the
date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible assets are not
amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are subsequently measured at
cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising from the derecognition of
intangible assets are measured as the difference between net disposal proceeds and the carrying amount of the intangible asset.
The method and useful lives of finite life intangible assets are reviewed annually.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for impairment, or
more frequently if events or changes in circumstances indicate that it might be impaired and is carried at cost less accumulated
impairment losses. Impairment losses on goodwill are taken to profit or loss and are not subsequently reversed.
Brand names
Brand names are assessed as having an indefinite useful life on the basis of brand strength, ongoing expected profitability and
continuing support. Brand names are not amortised, but are instead tested for impairment annually, or more frequently if events
or changes in circumstances indicate that it might be impaired.
Customer relationships
Customer relationships acquired in a business combination are amortised on a straight-line basis over the period of their expected
benefit, being their finite useful life of 7 to 10 years.
Importation rights
Importation rights acquired are amortised on a straight-line basis over the term of the distribution agreement, being 9 years.
Importation rights are tested for impairment if events or changes in circumstances indicate that the rights might be impaired (e.g.
compliance with the terms of the rights agreement including achieving minimum annual purchase volume levels).
34
Notes to the financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
Impairment of non-financial assets
Other non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds
its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the present
value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating
unit (“CGU”) to which the asset belongs. Assets that do not generate cash inflows that are largely independent of the cash inflows
from other assets are grouped together to form a cash-generating unit, which represents the smallest identifiable group of assets
that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and which
are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts are
unsecured and are usually paid within 30 days of recognition.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are
subsequently measured at amortised cost using the effective interest method.
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is probable
the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount
recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date,
taking into account the risks and uncertainties surrounding the obligation. If the time value of money is material, provisions are
discounted using a current pre-tax rate specific to the liability. The increase in the provision resulting from the passage of time is
recognised as a finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled
wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled wholly within 12 months of the reporting date are
measured at the present value of expected future payments to be made in respect of services provided by employees up to the
reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures and periods
of service. Expected future payments are discounted using market yields at the reporting date on high-quality corporate bonds
with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
Share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, which are provided to employees in exchange for the
rendering of services.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using a
Binomial option pricing model for options or a Monte Carlo simulation for rights, that takes into account the exercise price, the
term of the award, the impact of dilution, the share price at grant date, the expected price volatility of the underlying share, the
expected dividend yield, the risk free interest rate for the term of the award and (for rights only) the total shareholder return
required for the various portion of rights to vest, together with non-vesting conditions that do not determine whether the Group
receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions.
35
Notes to the financial statements
30 June 2024
Note 2. Material accounting policy information (continued)
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period.
The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number
of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period
is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are
considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as a
cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the vesting period, any
remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments
Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations
Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
New Accounting Standards and Interpretations not yet mandatory or early adopted
No Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have been early adopted by the Group for the annual reporting period ended 30 June 2024. These Standards and Interpretations
are not expected to have a material impact on the Group in the current of future reporting periods and on foreseeable future
transactions.
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the
reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to
assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on
historical experience and on other various factors, including expectations of future events, management believes to be reasonable
under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The
judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities (refer to the respective notes) within the next financial year are discussed below.
Recognition of identifiable intangible assets on acquisition
Brand names, customer relationships and accreditations have been recognised on the acquisition of subsidiaries in the prior period.
Brand names have been valued using the relief from royalty method, customer relationships have been valued using the excess
earnings method and accreditations have been valued using the reproduction cost method. The valuation of these assets is based
on the acquisition date present value of expected future cash flows associated with the brand and the recurring current customers
covering a period of 5 to 12 years. These cash flows have been calculated using annual growth rates of between 2.0%-6.3%, a
terminal growth rate of 2.0%-2.5%, a royalty rate of 1.25%-4.0% (for brand name intangible assets) and a pre-tax discount rate
between 13.0%-20.0%. Importation rights have been valued based on the acquisition cost. In FY2024, the Group recognised an
impairment expense on a brand name belonging to the DWC and IOE CGU (refer to note 15).
Goodwill and other indefinite life intangible assets
The Group tests annually, or more frequently if events or changes in circumstances indicate impairment, whether goodwill and
other indefinite life intangible assets have suffered any impairment, in accordance with the accounting policy stated in note 2. The
recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require
the use of assumptions, including estimated discount rates based on the current cost of capital and growth rates of the estimated
future cash flows (refer to note 15).
36
Notes to the financial statements
30 June 2024
Note 3. Critical accounting judgements, estimates and assumptions (continued)
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The Group assesses impairment of non-financial assets other than goodwill and other indefinite life intangible assets at each
reporting date by evaluating conditions specific to the Group and to the particular asset that may lead to impairment. If an
impairment trigger exists, the recoverable amount of the asset is determined. This involves value-in-use calculations, which
incorporate a number of key estimates and assumptions.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments
(awards) at the date at which they are granted. The fair value is determined by using a Binomial model (options) or Monte Carlo
simulation (rights) taking into account the terms and conditions upon which the awards were granted. The accounting estimates
and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and
liabilities within the next annual reporting period but may impact profit or loss and equity.
Share-based payments expense under the Employee Equity Plan and Employee Share Option Plan has been recognised over the
expected vesting period of the options. The share-based payment expense incurred is equal to the value of the award (i.e. rights,
options) and management have assessed the fair value of the awards using a Binominal model for valuation of options and Monte
Carlo simulation for valuation of rights. The following key criteria was used in each valuation: pre-determined exercise price, share
price at grant date based on estimated enterprise value of the company, risk-free rate, volatility of share price, assumed vesting
period from grant date and future share price targets (for the rights only) (refer to note 24 for further details of each group of
awards issued).
Warranty provision
In determining the level of provision required for warranties the Group has made judgements in respect of the expected
performance of the products, the number of customers who will actually claim under the warranty and how often, and the costs
of fulfilling the conditions of the warranty (refer to note 19).
Makegood provision
The Group has provisions for makegood of leased premises. The Group has made judgements in respect of the expected costs to
makegood premises. This has been based on historical makegood costs of premises where the lease has been terminated and
where necessary, adjusted to reflect the makegood clauses stipulated in the lease agreements.
Incremental borrowing rate for lease accounting
Lease payments are discounting using the interest rate implicit in the lease. If that rate cannot be readily determined, which is
generally the case for leases within the Group, an incremental borrowing rate is used, being the rate the Group would have to
pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment
with similar terms, security and conditions. To determine the incremental borrowing rate, the Group uses recent third-party
financing as a starting point, adjusted to reflect changes in financing conditions since third-party financing was received.
Determining lease term
In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise
an extension option. Extension options are only included in the lease term if the lease is reasonably certain to be extended. The
lease term is reassessed if an option is exercised. The assessment of reasonable certainty is only revised if a significant event or a
significant change in circumstances occurs, which affects this assessment.
Inventory
Management has assessed the value of inventory that is likely to be sold below cost using past experience and judgement on the
likely sell through rates of various items of inventory and booked a provision for this amount.
Income tax
The Group is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in determining the
provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which
the ultimate tax determination is uncertain. The Group recognises liabilities for anticipated tax audit issues based on the Group's
current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such
differences will impact the current and deferred tax provisions in the period in which such determination is made (refer to note 8).
37
Notes to the financial statements
30 June 2024
Note 4. Operating segments
Identification of reportable operating segments
The Group's operating segments are based on the internal reports that are reviewed and used by the Board of Directors (who are
identified as the Chief Operating Decision Makers (“CODM”)) in assessing performance and in determining the allocation of
resources.
The Directors are of the opinion that there is one reportable segment in the Group as the CODM reviews results, assesses
performance and allocates resources at a Group level.
As the information reported to the CODM is the consolidated results of the Group, the segment results are shown throughout these
financial statements and are not duplicated here.
Non-current assets
As at 30 June 2024, $116,378,000 (2023: $112,331,000) of the Group's non-current assets (excluding deferred taxes) were held in
Australia, with $28,261,000 held in New Zealand (2023: $18,152,000) and $379,000 (2023: $333,000) held in South Africa,
respectively.
Major customers
During FY2024, none of the Group's external revenue was derived from sales of greater than 10% to any customer (2023: none).
Note 5. Revenue from contracts with customers
2024
2023
$'000
$'000
Sale of goods and services revenue
533,431
582,284
533,431
582,284
There is significant integration between sales of goods and services revenue where the performance obligations are satisfied
together.
Disaggregation of revenue
The disaggregation of revenue from contracts with customers by geographic region is as follows:
Australia
391,401
441,587
New Zealand
131,187
130,948
South Africa
10,843
9,749
533,431
582,284
Note 6. Other income
Recovery of bad debts
95
15
Interest income
142
30
Finance income on the net investment in the lease
150
13
Gain/(loss) on disposal of property, plant and equipment
626
(39)
Other income
969
351
1,982
370
38
Notes to the financial statements
30 June 2024
Note 7. Expenses
2024
2023
$'000
$'000
Profit before income tax includes the following specific expenses:
Depreciation
Leasehold improvements
389
282
Plant and equipment
2,379
1,957
Motor vehicles
1,161
1,288
Right-of-use assets
18,972
17,655
Total depreciation
22,901
21,182
Amortisation
Customer relationships
2,339
2,330
Importation rights
530
528
Total amortisation
2,869
2,858
Total depreciation and amortisation
25,770
24,040
Finance costs
Interest and finance charges paid/payable for financial liabilities
7,170
6,282
Interest and finance charges paid/payable for lease liabilities
3,954
2,105
Other interest and finance charges paid/payable
(25)
35
Finance costs expensed
11,099
8,422
Foreign exchange loss
Realised foreign exchange (gain)/loss
(716)
1,804
Unrealised foreign exchange (gain)/loss
(35)
185
Net foreign exchange (gain/)loss
(751)
1,989
Expense relating to leases
Expense relating to short-term leases
344
1,385
Expense relating to leases of low value assets
23
-
367
1,385
Superannuation expense
Defined contribution superannuation expense
5,577
5,120
Impairment expense
Impairment of intangible assets
270
-
39
Notes to the financial statements
30 June 2024
Note 8. Income tax
2024
2023
$'000
$'000
Income tax expense
Current tax
3,429
2,857
Deferred tax
(1,756)
(1,075)
(Over)/under provision in prior years
494
(822)
Income tax expense
2,167
960
Deferred tax included in income tax expense comprises:
(Increase)/decrease in deferred tax assets
(1,756)
(1,075)
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense
3,409
3,855
Tax at the statutory tax rate of 30%
1,023
1,156
Tax effect amounts which are not deductible in calculating taxable income:
Sundry items
778
703
1,801
1,859
Adjustment recognised for prior periods
494
(822)
Difference in overseas tax rates
(128)
(77)
Income tax expense
2,167
960
Deferred tax
Net deferred tax comprises temporary differences attributable to:
Thin capitalisation debt deduction
457
-
Acquisition costs
(13)
(7)
Provisions
4,039
4,471
Property, plant and equipment
(1,622)
(3,355)
Intangibles
(5,203)
(6,304)
Right-of-use assets
(23,050)
(18,110)
Other
(1,596)
(421)
Lease liabilities
25,208
19,940
Foreign currency exchange
(12)
-
Deferred tax liabilities
(1,792)
(3,786)
Movements:
Opening balance
(3,786)
(5,686)
Credited/(charged) to profit or loss
1,756
1,075
(Under)/over provision in prior year
242
822
Foreign exchange differences
(4)
3
Closing balance
(1,792)
(3,786)
40
Notes to the financial statements
30 June 2024
Note 9. Cash and cash equivalents
2024
2023
$'000
$'000
Cash at bank
38,886
33,040
38,886
33,040
Reconciliation to cash and cash equivalents at the end of the financial year
The above figures are reconciled to cash and cash equivalents at the end of the financial year as shown in the statement of cash
flows as follows:
Balances as above
38,886.
33,040.
Bank overdraft (note 17)
(680)
(461)
Balance as per statement of cash flows
38,206
32,579
Note 10. Trade and other receivables
Trade receivables
74,838
77,220
Less: Allowance for expected credit losses
(1,009)
(1,304)
73,829
75,916
Other receivables
611
827
74,440
76,743
Allowance for expected credit losses
The Group has recognised a net loss of $205,000 (2023: $358,000) in profit or loss in respect of the expected credit losses. Trade
receivables past due but not impaired amount to $13,089,000 (2023: $11,509,000).
At 30 June 2024 an ageing analysis of those trade receivables are as follows:
Not overdue
61,749
65,711
1 to 30 days overdue
9,901
9,055
31 to 60 days overdue
1,086
1,180
61 plus days overdue
2,102
1,274
74,838
77,220
Refer to note 28 for further information on financial instruments.
Note 11. Inventories
Finished goods - at cost
125,863
118,232
Less: Provision for impairment
(326)
(612)
125,537
117,620
Stock in transit - at cost
24,044
12,168
149,581
129,788
41
Notes to the financial statements
30 June 2024
Note 12. Other financial assets
2024
2023
$'000
$'000
Current
Term deposits
221
151
Net investment in leases
1,356
1,128
1,577
1,279
Non-Current
Term deposits
21
76
Net investment in leases
718
1,467
739
1,543
The Group has classified the sublease of a warehouse and office space as finance leases because both subleases are for a
significant portion of the remaining term of the head leases.
The following table sets out a maturity analysis of the lease receivables, showing the undiscounted lease payments to be received
after the reporting date.
Less than one year
1,444
1,238
One to two years
380
1,297
Two to three years
396
224
Total undiscounted lease payments receivable
2,220
2,759
Unearned finance income
(146)
(164)
Net investment in leases
2,074
2,595
Note 13. Property, plant and equipment
Leasehold improvements - at cost
2,785
2,227
Less: Accumulated depreciation
(1,446)
(931)
1,339
1,296
Plant and equipment - at cost
25,669
24,008
Less: Accumulated depreciation
(15,749)
(14,296)
9,920
9,712
Motor vehicles - at cost
21,393
21,806
Less: Accumulated depreciation
(15,687)
(16,023)
5,706
5,783
16,965
16,791
42
Notes to the financial statements
30 June 2024
Note 13. Property, plant and equipment (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Leasehold
Plant and
Motor
improvements
equipment
vehicles
Total
$'000
$'000
$'000
$'000
Balance at 30 June 2022
1,357
9,908
5,566
16,831
Additions
298
2,203
1,609
4,110
Disposals
(84)
(469)
(153)
(706)
Depreciation expense
(282)
(1,957)
(1,288)
(3,527)
Foreign exchange differences
7
27
49
83
Balance at 30 June 2023
1,296
9,712
5,783
16,791
Additions
470
2,698
1,285
4,453
Disposals
(31)
(82)
(115)
(228)
Depreciation expense
(389)
(2,379)
(1,161)
(3,929)
Foreign exchange differences
(7)
(29)
(86)
(122)
Balance at 30 June 2024
1,339
9,920
5,706
16,965
Note 14. Right-of-use assets
2024
2023
$'000
$'000
Land and buildings - right-of-use
109,873
89,246
Less: Accumulated depreciation
(41,635)
(32,375)
68,238
56,871
Plant and equipment - right-of-use
3,967
1,145
Less: Accumulated depreciation
(918)
(399)
3,049
746
Motor vehicles - right-of-use
11,851
5,461
Less: Accumulated depreciation
(3,878)
(1,862)
7,973
3,599
79,260
61,216
43
Notes to the financial statements
30 June 2024
Note 14. Right-of-use assets (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current year are set out below:
Land and
buildings
Plant and
equipment
Motor vehicles
Total
$'000
$'000
$'000
$'000
Balance at 30 June 2022
60,267
796
4,018
65,081
Additions
20,700
191
817
21,708
Disposals
(8,039)
(27)
(102)
(8,168)
Depreciation expense
(16,268)
(208)
(1,179)
(17,655)
Foreign exchange differences
211
(6)
45
250
Balance at 30 June 2023
56,871
746
3,599
61,216
Additions
33,291
3,232
6,557
43,080
Disposals
(5,615)
(261)
(6)
(5,882)
Depreciation expense
(16,209)
(666)
(2,097)
(18,972)
Foreign exchange differences
(100)
(2)
(80)
(182)
Balance at 30 June 2024
68,238
3,049
7,973
79,260
Note 15. Intangible assets
2024
2023
$'000
$'000
Goodwill
30,502
30,556
Less: Accumulated impairment loss
(1,311)
(1,311)
29,191
29,245
Customer relationships
17,200
17,212
Less: Accumulated amortisation and impairment loss
(8,325)
(5,993)
8,875
11,219
Importation rights
12,106
12,106
Less: Accumulated amortisation and impairment loss
(10,410)
(9,880)
1,696
2,226
Brand names
8,362
8,375
Less: Accumulated impairment loss
(270)
-
8,092
8,375
Accreditations
200
200
48,054
51,265
44
Notes to the financial statements
30 June 2024
Note 15. Intangible assets (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Customer
Importation
Brand
Goodwill
relationships
rights
Names
Accreditations
Total
$'000
$'000
$'000
$'000
$'000
$'000
Balance at 30 June 2022
29,000
13,500
2,754
8,310
200
53,764
Amortisation expense
-
(2,330)
(528)
-
-
(2,858)
Foreign exchange differences
245
49
-
65
-
359
Balance at 30 June 2023
29,245
11,219
2,226
8,375
200
51,265
Amortisation expense
-
(2,339)
(530)
-
-
(2,869)
Impairment expense
-
-
-
(270)
-
(270)
Foreign exchange differences
(54)
(5)
-
(13)
-
(72)
Balance at 30 June 2024
29,191
8,875
1,696
8,092
200
48,054
Impairment of intangible assets
An impairment loss of $270,000 was recognised in relation to the MPC brand name associated with the DWC and IOE CGU. The fair
value of the brand name using the relief from royalty method was determined to be less than the carrying value, resulting in the
impairment being recognised this financial year. This impairment loss is classified in other expenses in the consolidated statement
of profit or loss and other comprehensive income.
Impairment testing
For the purpose of impairment testing, goodwill and brand names are allocated to the respective cash-generating units:
2024
2023
$'000
$'000
Goodwill
CGU:
- Tyre & Wheel
5,228
6,002
- DWC and IOE
3,113
2,339
- Black Rubber
7,680
7,680
- Carter’s
13,170
13,224
29,191
29,245
Brand names
CGU:
- DWC and IOE
2,123
2,393
- Black Rubber
2,400
2,400
- Carter’s
3,569
3,582
8,092
8,375
The Group tests whether goodwill and brand names have suffered any impairment on an annual basis. The recoverable amount of
the CGUs was determined based on value-in-use calculations which require the use of assumptions. The calculations are conducted
using a discount cash flow methodology based on financial budgets approved by the Board of Directors for the 2025 financial year.
The FY2025 cashflow budgets have then been extrapolated using estimated annual growth rates, together with terminal growth
rates.
At 30 June 2024, resulting from an internal organisational restructure, the Group completed impairment testing of the DWC and
IOE CGU, having previously been the IOE CGU in prior years. This realignment provides a more accurate representation of the
Group’s current operational structure and financial performance. Goodwill of $774,000 was reallocated from the Tyre & Wheel
CGU to the DWC and IOE CGU as part of this realignment. This reallocation was performed using a relative value approach,
reflecting the relative value DWC contributed to the Tyre & Wheel CGU on an EBITDA basis at the time of the reallocation. The
comparative period illustrates the prior year CGU disclosures.
45
Notes to the financial statements
30 June 2024
Note 15. Intangible assets (continued)
The following table sets out the key assumptions for those CGUs that have significant goodwill and brand names allocated to them,
which have not been impaired during the year:
2024
Tyre and Wheel
DWC and
IOE
Black Rubber
Carter’s
%
%
%
%
Average annual growth rate beyond
FY25 budget period(%)
3.0%
3.0%
3.0%
3.0%
Terminal growth rate (%)
2.5%
2.5%
2.5%
2.5%
Pre-tax discount rate (%)
14.7%
15.7%
15.0%
14.1%
2023
Tyre and Wheel
IOE
Black Rubber
Carter’s
%
%
%
%
Average annual growth rate beyond
FY24 budget period (%)
2.0%
2.0%
2.0%
2.0%
Terminal growth rate (%)
2.5%
2.5%
2.5%
2.5%
Pre-tax discount rate (%)
11.6%
15.7%
15.4%
14.6%
Management has determined the value assigned to each of the above key assumptions as follows:
Assumption
Approach used to determine values
Sales growth rate in FY25
budget period
Except as noted below, sales growth in the FY25 budget period reflects past performance adjusted for
management’s expectations of market developments in line with industry growth rates.
Carter’s CGU – sales growth in the FY25 budget period is higher than past experience reflecting new
sales opportunities which commenced at the end of FY2024.
Tyre & Wheel CGU – sales growth in the FY25 budget period is higher than past experience due to
increased sales expected from the distribution of Dunlop in Australia and New Zealand.
Average annual growth
rate beyond FY25 budget
period
Average annual growth rate over the five-year forecast period beyond the 2025 financial year is based
on past performance and management’s expectations of market developments.
Terminal growth rate
Terminal growth rate was based on management’s expectations of long-term growth.
Annual gross margin
Except as noted below, gross margin percentage in the budget and forecast period reflect past
experience adjusted for management’s expectations of market developments.
Black Rubber CGU – gross margin % is 1.6% higher in the FY25 budget and forecast period than the
gross margin percentage achieved in FY2024. This reflects improved purchasing opportunities.
DWC and IOE CGU – gross margin % is 0.8% higher in the FY25 budget and forecast period than the
gross margin percentage achieved in FY2024. This reflects a change in the CGU's product mix due to
the realignment of this CGU due to the internal organisational restructure detailed above.
Discount rate
A post-tax estimate based on NTAW Holdings’ weighted average cost of capital.
Significant estimate: Impact of possible changes in key assumptions
A sensitivity analysis was performed on key assumptions in FY2024.
In FY2024 and FY2023, with the exception of the Carter’s CGU and Tyre and Wheel CGU, no reasonable change in any of the key
assumptions would result in a material impairment.
46
Notes to the financial statements
30 June 2024
Note 15. Intangible assets (continued)
Specifically for the Carter’s CGU, the amount by which the recoverable amount exceeds the carrying amount is $4,900,000:
a 0.73% (2023: 0.77%) decrease in the average annual gross margin % with no reduction in costs would require an
impairment of the goodwill of this CGU; and
a 1.7% (2023: 12.1%) decrease in the sales growth rate in the FY25 budget period with no reduction in costs would
require an impairment of the goodwill of this CGU.
No reasonable change in any of the other key assumptions would result in a material impairment for the Carter’s CGU in FY2024
and FY2023.
Specifically for the Tyre & Wheel CGU, the amount by which the recoverable amount exceeds the carrying amount is $41,200,000.
A 4.5% (2023: 15.2%) decrease in the sales growth rate in the FY25 budget period with no reduction in costs would require an
impairment of the goodwill of this CGU. No reasonable change in any of the other key assumptions would result in a material
impairment for the Tyre & Wheel CGU in FY2024 and FY2023.
Note 16. Trade and other payables
2024
2023
$'000
$'000
Current
Trade payables
91,623
61,286
Accruals and other payables
12,007
19,169
Deferred consideration
-
2,600
103,630
83,055
Refer to note 28 for further information on financial instruments.
Note 17. Borrowings
Current
Bank overdraft
680
461
Bank facility
4,500
4,500
5,180
4,961
Non-current
Bank facility
85,884
88,285
85,884
88,285
Total secured liabilities
The total secured liabilities are as follows:
Bank overdraft
680
461
Bank facility
90,384
92,785
91,064
93,246
The bank facility has an expiry date of 30 September 2027.
Refer to note 28 for further information on financial instruments.
47
Notes to the financial statements
30 June 2024
Note 17. Borrowings (continued)
Assets pledged as security
The bank facility is secured over the assets of NTAW Holdings Limited and all subsidiaries except Top Draw Tyres Proprietary Limited
t/a Tyrelife Solutions (“TLS”). The total value of TLS’ assets as at 30 June 2024 is $5,741,000.
Compliance with loan covenants
The Group has complied with the financial covenants of its borrowing facility during the 2024 and 2023 reporting period.
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
2024
2023
$'000
$'000
Total facilities
Bank overdraft
3,180
2,961
Bank facility
99,500
101,750
Bank guarantee
10,000
10,000
112,680
114,711
Used at the reporting date
Bank overdraft
680
461
Bank facility1
91,608
94,298
Bank guarantee
7,562
8,277
99,850
103,036
1 Includes lease liabilities which were funded by the bank facility.
Unused at the reporting date
Bank overdraft
2,500
2,500
Bank facility
7,892
7,452
Bank guarantee
2,438
1,723
12,830
11,675
48
Notes to the financial statements
30 June 2024
Note 18. Lease liabilities
2024
2023
$'000
$'000
Current
Property leases
15,725
14,438
Equipment leases
764
265
Motor vehicle leases
2,021
1,199
18,510
15,902
Non-current
Property leases
59,468
48,213
Equipment leases
2,175
320
Motor vehicle leases
6,330
2,467
67,973
51,000
The Group has leases for warehouse and office facilities, warehouse equipment and motor vehicles. Leases are either non-
cancellable or may only be cancelled by incurring a substantive termination fee. All variable payments are linked to an index. The
lease liabilities are secured by the related underlying asset.
Leasing activities
The table below describes the nature of the Group’s leasing activities by type of right-of-use asset.
Right-of-use asset
No. of
leases
Range of
remaining
term (yrs)
Average
remaining
term (yrs)
No. of leases
with
extension
options
No. of leases
with
purchase
options
No. of leases
with variable
payments
linked to an
index
No. of leases
with
termination
options
Land and buildings
65
0.1 – 11.5
3.3
52
-
43
-
Plant and equipment
56
0.6 – 6.9
3.7
-
-
-
-
Motor vehicles
135
0.1 – 6.3
3.4
-
30
-
-
The total cash outflow for leases in the 2024 financial year was $21,133,000 (2023: $18,879,000).
49
Notes to the financial statements
30 June 2024
Note 19. Provisions
2024
2023
$'000
$'000
Current
Employee benefits
9,769
10,504
Warranties
477
716
Make-good
16
119
10,262
11,339
Non-current
Employee benefits
833
641
Warranties
578
822
Make-good
822
787
2,233
2,250
Amounts not expected to be settled within the next 12 months
The current provision for employee benefits includes all unconditional entitlements where employees have completed the required
period of service and also those where employees are entitled to pro-rata payments in certain circumstances. The entire amount
is presented as current, since the Group does not have an unconditional right to defer settlement. Based on past experience, the
Group expects all employees to take the full amount of accrued leave or require payment within the next 12 months.
Warranties
The provision represents the estimated warranty claims in respect of products sold which are still under warranty at the reporting
date. The provision is estimated based on historical warranty claim information, sales levels and any recent trends that may suggest
future claims could differ from historical amounts.
Make-good
The provision represents the present value of the estimated expenditure required to restore leased premises to their original
condition at the end of the lease term. These costs have been capitalised as part of the cost of the right-of-use assets once a reliable
estimate of the cost can be made and are amortised over the term of the lease.
Movements in provisions
Movements in each class of provision (current and non-current) during the current financial year, other than employee benefits,
are set out below:
2024
2023
Warranties
$'000
$'000
Carrying amount at the start of the year
1,538
1,615
Additional provisions recognised
-
689
Amounts used
(483)
(766)
Carrying amount at the end of the year
1,055
1,538
Make-good
Carrying amount at the start of the year
907
745
Additional provisions recognised
-
435
Amounts used
(69)
(273)
Carrying amount at the end of the year
838
907
50
Notes to the financial statements
30 June 2024
Note 20. Issued capital
2024
2023
2024
2023
Shares
Shares
$'000
$'000
Ordinary shares - fully paid
134,136,094
133,271,318
94,569
94,068
Movements in ordinary share capital
Details
Date
Shares
Issue price
$'000
Balance
1 Jul 2022
131,936,002
93,122
Shares issued per Dividend Reinvestment Plan
7 Oct 2022
1,286,312
$0.7200
926
Redemption of share options
14 Oct 2022
29,752
$0.3735
10
Redemption of share options
22 June 2023
19,252
$0.3735
10
Balance
30 June 2023
133,271,318
94,068
Redemption of share options
21 Sep 2023
37,113
$0.3735
10
Redemption of share options
22 Sep 2023
177,506
$0.3735
62
Redemption of share options
3 Oct 2023
183,960
$0.3735
48
Redemption of share options
10 Oct 2023
21,197
$0.5745
45
Redemption of share options
11 Oct 2023
445,000
$0.5745/$0.3735
336
Balance
30 June 2024
134,136,094
94,569
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to
the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Company does not
have a limited amount of authorised capital.
By way of a poll each share shall have one vote at a meeting.
Capital risk management
The Group's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns
for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total
borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce debt.
The Group’s capital management policy seeks to maintain balance sheet strength and flexibility to respond to organic and inorganic
opportunities as they arise, to create long-term sustainable value for shareholders, source the lowest cost available capital and
service debt obligations.
51
Notes to the financial statements
30 June 2024
Note 21. Reserves
2024
2023
$'000
$'000
Foreign currency translation reserve
(2,828)
(2,722)
Share-based payments reserve
1,948
1,629
(880).
(1,093).
Foreign currency translation reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign operations
to Australian Dollars. It is also used to recognise gains and losses on hedges of the net investments in foreign operations.
Share-based payments reserve
The share-based payments reserve is used to recognise the value of equity benefits provided to employees as part of their
remuneration. Share-based payments reserve is transferred to share capital upon exercising of options and is transferred to
retained earnings upon lapsing or forfeiture of options.
Note 22. Dividends
Dividends paid or declared during the financial year were as follows:
Final dividend for the year ended 30 June 2023 (2023: 30 June 2022) of $nil (2023: 1.50
cents) per ordinary share
-
1,981
Interim dividend for the year ended 30 June 2024 (2023: 30 June 2023) of $nil (2023: $nil)
per ordinary share
-
-
-
1,981
At the date of signing these financial statements, there has been no dividend’s declared by the Company and no dividend’s
payable.
Franking credits
Franking credits available for subsequent financial years based on a tax rate of 30%
20,339
19,027
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for franking credits
or debits that will arise from the payment or refund of the amount of the provision for income tax or income tax refundable at the
reporting date.
52
Notes to the financial statements
30 June 2024
Note 23. Cash flow information
Reconciliation of profit after income tax to net cash from operating activities:
2024
2023
$'000
$'000
Profit after income tax expense for the year
1,242
2,895
Adjustments for:
Depreciation and amortisation
25,770
24,040
Share-based payments
586
729
Impairment of receivables
300
358
Net loss/(gain) on disposal of property, plant and equipment
(626)
39
Gain on modification of leases
(304)
-
Foreign exchange differences
389
1,814
Borrowing costs on draw down of debt
200
249
Interest charged on lease liabilities
3,954
2,105
Impairment of intangibles
270
-
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
2,003
1,370
Decrease/(increase) in inventories
(19,793)
(2,522)
Decrease/(increase) in other assets
518
1,042
Increase/(decrease) in trade and other payables
23,749
(3,190)
Increase/(decrease) in provisions
(1,094)
(2,097)
Increase/(decrease) in current tax liability/(asset)
51
1,337
Decrease/(increase) in deferred tax assets
(1,992)
(1,892)
Net cash from operating activities
35,223
26,277
Liabilities from financing activities: Borrowings and Lease liabilities
Balance at the start of the year
159,687
160,341
Net cash flows*
(19,780)
(16,982)
Recognition of lease liabilities
43,080
21,308
Derecognition of lease liabilities
(5,802)
(5,252)
Foreign exchange differences
(318)
272
Balance at the end of the year
176,867
159,687
*Net cash flows are net of interest paid on lease liabilities
Non-cash financing activities for acquisition of right-of-use assets disclosed in note 14.
53
Notes to the financial statements
30 June 2024
Note 24. Share-based payments
Employee Equity Plan (“EEP”)
The Company adopted an employee equity plan on 3 November 2021. The details of the EEP are summarised as follows:
Under the Plan, eligible employees or contractors of a group company, directors (including non-executive directors) and other
persons who are declared by the Board to be eligible to receive awards and who otherwise meet the criteria of an eligible
participant under ASIC Class Order 14/1000 may be offered rights, options, exempt share awards, salary sacrifice share awards
and performance share awards.
Participation in the EEP is at the Board’s discretion and no individual has a contractual right to participate in it or to receive any
guaranteed benefits.
Any right or option that has not vested may not be exercised, unless (subject to applicable laws) the Board exercises its absolute
discretion, in circumstances where the Board considers it to be in the best interests of the Company to:
vary or waive the relevant performance conditions and/or exercise conditions, and declare the rights and/or options to
have vested; or
bring forward the date upon which rights and/or options may be exercised.
An invitation may only be made under the EEP if the number of shares that may be acquired on exercise of the awards to which
the invitation relates, when aggregated with:
the number of shares which could be issued if each outstanding invitation or award under the EEP or any other
employee equity incentive scheme of the Company (covered by the Class Order or an individual instrument made by
ASIC in terms similar to the Class Order) was accepted or exercised; and
the number of shares issued during the previous three years pursuant to the EEP or any other employee equity incentive
scheme of the Company (covered by the Class Order or an individual instrument made by ASIC in terms similar to the
Class Order),
but disregarding any invitation given, award acquired or share issued by way of or as a result of:
an offer to a person situated outside of Australia at the time of receipt of the offer;
an offer which did not require disclosure to investors under the Corporations Act; or
an offer made under a disclosure document (within the meaning of the Corporations Act),
does not exceed 5% of the total number of issued shares at the time the invitation was made.
The EEP may be suspended or terminated at any time by resolution of the Board. Suspension or termination of the EEP will not
prejudice the accrued rights of participants.
The Board will:
reduce the exercise price of rights and/or options (if any) in the event of a new issue; and/or
change the number of underlying shares to which awards relate in the event of a bonus issue, in accordance with the
ASX Listing Rules.
Employee Share Option Plan (“ESOP”)
The Company adopted an employee share option plan on 6 November 2017. The details of the ESOP are summarised as follows:
Options may be granted under the ESOP to any person who is, or is proposed to be, a full-time or part-time employee, a non-
executive director, a contractor (40% full-time equivalent (“FTE”)) or a casual employee (40% FTE) of the Company or any of its
associated bodies corporate, and whom the Board determines to be an eligible person for the purposes of participation in the ESOP
(referred to as an 'Eligible Person').
An option may not be granted under the ESOP if, immediately following its grant, the shares to be received on exercise of the
option, when aggregated with the number of shares which would be issued if each unvested option granted under the ESOP or any
other employee incentive scheme of the Company were to vest and be exercised and the number of shares issued in the previous
3 years under the ESOP or any other employee incentive scheme of the Company, exceeds 5% of the total number of issued shares
at the time of grant (or any varied limit if permitted under the Corporations Act 2001, ASX Listing Rules and ASIC
instruments). Certain offers of options may be excluded from calculation as permitted under Class Order 14/1000, including
excluded offers under section 708 of the Corporations Act 2001 and offers under a disclosure document.
54
Notes to the financial statements
30 June 2024
Note 24. Share-based payments (continued)
Unless otherwise specified in the offer of an option, if a “Change of Control Event” occurs before the vesting date of an option, that
option immediately vests and ceases to be subject to any performance condition to which it was subject. A Change of Control Event
means the occurrence of one or more of the following events:
a person who has offered to acquire all shares in the Company acquires Control (as defined in section 50AA of the
Corporations Act 2001) of the Company;
any other event occurs which causes a change in Control of the Company;
unless the Board determines otherwise, a takeover bid is recommended by the Board or a scheme of arrangement which
would have a similar effect to a full takeover bid is announced by the Company; and
any other event which the Board reasonably considers should be regarded as a Change of Control Event.
If the Company conducts a rights issue, the exercise price of options will be adjusted in accordance with the adjustment formula
for pro rata issues set out in the Listing Rules.
If the Company makes a bonus issue of securities to holders of shares, the rights of a holder in respect of an unexercised option will
be modified such that the participant will receive, upon exercise of an option, one Share plus such additional securities which the
participant would have received had the participant exercised the option immediately before the record date for that bonus issue
and participated in the bonus issue as the holder of the share.
The Rules of the ESOP allow participants to utilise a cashless exercise facility where a Participant can set-off the Exercise Price
against the number of shares which the participant is entitled to receive upon exercise of the participant’s options. By using the
cashless exercise facility, the participant will receive shares to the value of the surplus after the exercise price has been set-off. If
a participant elects to use the cashless exercise facility, the participant will only be issued that number of shares (rounded down
to the nearest whole number) as are equal to the value of the difference between the exercise price otherwise payable for the
options and the then market value of the shares at the time of exercise (which is determined as the volume weighted average
price of Shares on the ASX over the five trading days prior to exercise).
An unvested option lapses upon the first to occur of the following:
its expiry date;
any applicable performance condition not being satisfied prior to the end of any prescribed performance period;
a transfer or purported transfer of the option in breach of the rules;
30 days following the day the participant ceases to be employed or engaged by the Company or an associated body
corporate by resigning voluntarily and not recommencing employment with the Company or an associated body corporate
before the expiration of that 30 days;
30 days following the day the participant ceases to be employed or engaged by the Company or an associated body
corporate by reason of his or her death, disability, bona fide redundancy, or any other reason with the approval of the
Board and the participant has not recommenced employment with the Company or an associated body corporate before
the expiration of those 30 days, however the Board has a discretion to deem all or any of the options to have vested; or
termination of the participant’s employment or engagement with the Company or an associated body corporate on the
basis the participant acted fraudulently, dishonestly, in breach of the participant’s obligations or otherwise for cause.
A vested but unexercised option lapses upon the first to occur of the following:
its expiry date;
a transfer or purported transfer of the option in breach of the rules; or
termination of the participant’s employment or engagement with the Company or an associated body corporate on
the basis the participant acted fraudulently, dishonestly, in breach of the participant’s obligations or otherwise for
cause.
Subject to the ASX Listing Rules and the law, the Board may at any time by resolution amend or add to the rules of the
ESOP. However, the consent of a participant is required for any change to the rules or option terms which prejudicially affects the
rights of the participant in relation to the option (except for certain changes, including changes to benefit the administration of the
Plan or to comply with laws, ASX Listing Rules or regulations).
55
Notes to the financial statements
30 June 2024
Note 24. Share-based payments (continued)
Set out below are summaries of outstanding options granted on 8 November 2019, 25 February 2021 and 24 September 2021 and
outstanding rights granted on 17 December 2021 and 13 October 2023:
2024
Grant date
Expiry date
Exercise
price
Balance at
start of year
Granted
Lapsed
Exercised1
Balance at
end of year
13/10/2023
30/09/2028
$0.0000
-
2,270,000
(420,000)
-
1,850,000
17/12/2021
30/09/2026
$0.0000
1,002,364
-
(148,583)
-
853,781
24/09/2021
30/09/2025
$0.5745
160,000
-
-
(80,000)
80,000
25/02/2021
30/09/2025
$0.5745
1,680,000
-
-
(220,000)
1,460,000
08/11/2019
07/11/2024
$0.3735
1,635,000
-
-
(915,000)
720,000
4,477,364
2,270,000
(568,583)
(1,215,000)
4,963,781
1 During FY2024 and in accordance with the terms, 1,215,000 options were exercised by option holders. As a result, 350,224 options were net settled and the remaining 864,776
options were converted into ordinary shares. This resulted in a lower dilution of the issued capital of the Company on conversion. The weighted average share price at the date
of exercise of Options during FY2024 was $0.8305 (FY2023: $0.5975).
2023
Grant date
Expiry date
Exercise
price
Balance at
start of year
Granted
Lapsed
Exercised
Balance at
end of year
17/12/2021
30/09/2026
$0.0000
1,125,802
-
(123,438)
-
1,002,364
24/09/2021
30/09/2025
$0.5745
240,000
-
(80,000)
-
160,000
25/02/2021
30/09/2025
$0.5745
1,680,000
-
-
-
1,680,000
08/11/2019
07/11/2024
$0.3735
1,775,000
-
-
(140,000)
1,635,000
4,820,802
-
(203,438)
(140,000)
4,477,364
At 30 June 2024, 720,000 options were exercisable at an exercise price of $0.3735 and 1,390,000 options were exercisable at an
exercise price of $0.5745 (2023: $0.3735). The remaining rights balances at the end of the year had not vested.
The weighted average remaining contractual life of rights and options outstanding at the end of the financial year was 2.40 years
(2023: 1.91 years). The weighted average exercise price of the rights and options outstanding at the end of the financial year was
$0.2324 (2023: $0.3725). Options lapsed during the reporting period as the service conditions were not met.
Notes to the financial statements
30 June 2024
Note 24. Share-based payments (continued)
The performance conditions for the rights granted on 17 December 2021 and 13 October 2023 were as follows:
1. Total shareholder return (“TSR”) condition – the Compound Annual Growth Rate (“CAGR”) in the Company’s Total
Shareholder Return will be tested on the Vesting Date and the Rights will vest in accordance with the following TSR
CAGR hurdles:
TSR CAGR
% of Rights to vest
Less than 7%
0%
At least 7% but less than 10% p.a.
50%
At least 10% but less than 15% p.a.
70% to 100% on a straight-line basis
At least 15% p.a.
100%
TSR CAGR means the TSR compound annual growth rate as against the Base VWAP.
TSR means the total shareholder return to a shareholder of the Company, inclusive of Share Price Appreciation, capital
returns and dividends.
Share Price Appreciation means the difference between the Base VWAP and Vesting VWAP.
For rights granted on 17 December 2021, the Base VWAP means the volume weighted average price of Shares over the
10 Trading Days (as that term is defined in the Listing Rules) immediately before and 10 Trading Days immediately after
the release of the Company’s 2021 financial report. The 2021 financial report was released on 31 August 2021 and the
Base VWAP has been calculated at $1.25.
For rights granted on 13 October 2023, Base VWAP means the volume weighted average price of Shares over the 10
Trading Days (as that term is defined in the Listing Rules) immediately before and 10 Trading Days immediately after the
release of the Company’s 2023 financial report. The 2023 financial report was released on 29 August 2023 and the Base
VWAP has been calculated at $0.65.
For rights granted on 17 December 2021, Vesting VWAP means the volume weighted average price of Shares over the 10
Trading Days (as that term is defined in the Listing Rules) immediately before and 10 Trading Days immediately after the
release of the Company’s 2024 financial report, expected to be on or about 30 August 2024.
For rights granted on 13 October 2023, Vesting VWAP means the volume weighted average price of Shares over the 10
Trading Days (as that term is defined in the Listing Rules) immediately before and 10 Trading Days immediately after the
release of the Company’s 2026 financial report, expected to be on or about 31 August 2026.
2. Service condition – continuous employment of the employee with NTAW Holdings or one of its subsidiaries from the
Grant Date until the Vesting Date.
The performance conditions for the options granted on 25 February 2021 and 24 September 2021 were as follows:
1. Earnings per share (“EPS”) condition – the Company’s earnings per share for the year ended 30 June 2021 is at least 10%
higher than its EPS for the year ended 30 June 2020 or if this is not achieved, the Company’s EPS for the year ended 30
June 2022 is at least 10% higher than its EPS for the year ended 30 June 2020.
Calculation of the EPS growth rate is based upon the EPS results reported in NTAW Holdings financial statements for the
above years.
The base EPS for the year ended 30 June 2020 will be 5.51 cents per share. This is based upon the Company’s 2020 net
profit after providing for income tax and non-controlling interests and excluding amortisation (NPATA) attributable to
Shareholders of $5.665 million. The target EPS based on NPATA attributable to Shareholders for the 2021 year or if this is
not achieved, the 2022 year is, therefore, 6.06 cents per share.
The EPS results to be used for the 2021 and 2022 years will be based upon the Company’s audited financial statements
for that year. However, the EPS may be adjusted for items which the Board, in its discretion, considers should be included
in, or excluded from, this result. The EPS condition will be measured over two years if required to allow for uncertainty
regarding the ongoing impact of COVID-19 on execution of the Company’s growth strategies and the timing of synergies
to be realised from the acquisition of ACN 642 540 690 Pty Ltd (formerly ”Tyres4U Pty Ltd”) in August 2020.
56
57
Notes to the financial statements
30 June 2024
Note 24. Share-based payments (continued)
2. Service condition – continuous employment of the employee with NTAW Holdings or one of its subsidiaries from the Grant
Date until the Vesting Date.
The performance conditions for the options granted on 8 November 2019 were as follows:
1. Earnings per share condition – Company’s EPS for the year ended 30 June 2021 was to be at least 10% higher than its EPS
for the year ended 30 June 2019.
Calculation of the EPS growth rate is based upon the EPS results reported in NTAW Holdings’ audited financial statements
for the above years. The Basic EPS reported may be adjusted for items which the Board, in its discretion, considers should
be included in, or excluded from, the result.
The Board determined that the FY2019 base EPS for the Options would be 7.74 cents per share. This was based upon the
Company’s 2019 NPATA attributable to NTAW Holdings shareholders. The target EPS for the 2021 financial year (based
upon the Company’s NPATA attributable to NTAW Holdings shareholders) is 8.51 cents per share.
2. Service condition – continuous employment of the employee with NTAW Holdings or one of its subsidiaries from the
Grant Date until the Vesting Date.
Valuation model inputs
The valuation model inputs used to determine the fair value at the grant date for the rights and options below, are as follows:
Share price
Exercise
Expected
Dividend
Risk-free
Fair value
Grant date
Expiry date
at grant date
price
Volatility1
yield
interest rate
at grant date
13/10/2023
30/09/2028
$0.8000
$0.0000
54.40%
1.88%
3.95%
$0.5148
1 The expected volatility is based on the historic volatility (based on the period from the date the Company listed on the ASX to the relevant grant date), adjusted for any expected
changes to future volatility due to publicly available information.
Expenses recognised from share-based payment transactions
The expense recognised in relation to the share-based payment transactions was recognised within employee benefit expense
within the statement of profit or loss as follows:
2024
2023
$'000
$'000
Rights issued under the Employee Equity Plan and
Options issued under the Employee Share Option Plan
586
729
Total expense recognised from share-based payment transactions
586
729
58
Notes to the financial statements
30 June 2024
Note 25. Earnings per share
2024
2023
$'000
$'000
Profit after income tax
1,242
2,895
Non-controlling interest
321
436
Profit after income tax attributable to the owners of NTAW Holdings Limited
1,563
3,331
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
133,959,392
132,898,616
Adjustments for calculation of diluted earnings per share:
Weighted number of Options and rights over ordinary shares
4,307,601
4,553,098
Weighted average number of ordinary shares used in calculating diluted earnings per share
138,266,993
137,451,714
Cents
Cents
Basic earnings per share
1.17
2.51
Diluted earnings per share
1.13
2.42
Note 26. Key management personnel disclosures
The aggregate compensation made to directors and other members of key management personnel of the Group is set out below:
2024
2023
$
$
Short-term benefits1
2,148,313
1,575,894
Post-employment benefits
102,859
89,802
Long-term benefits
16,314
63,713
Share-based payments
284,998
208,985
2,552,484
1,938,394
1 The Group engaged in consulting services from a KMP member. Consulting fees for FY2024 totalled $126,000 (2023: $102,773), with $nil outstanding at 30 June 2024 (2023: $29,700).
Notes to the financial statements
30 June 2024
Note 27. Related party transactions
Parent entity
NTAW Holdings Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 32.
Key management personnel
Disclosures relating to key management personnel remuneration are set out in note 26.
Options
The number of options over ordinary shares in the Company held during the financial year by each director and other members of
key management personnel of the Group, including their personally related parties, is set out below:
2024
Balance at
Balance at
Balance at
the start of
commencement
Granted /
the end of
the year
of KMP
Lapsed
Exercised
the year
Options
P Ludemann1
350,000
-
-
-
350,000
J Lamb1
320,000
-
-
-
320,000
670,000
-
-
-
670,000
1
All options have vested. These remain exercisable at 30 June 2024 and at the date of this report.
2023
Balance at
Balance at
Balance at
the start of
commencement
Granted /
the end of
the year
of KMP
Lapsed
Exercised
the year
Options
P Ludemann1
350,000
-
-
-
350,000
J Lamb2
320,000
-
-
-
320,000
C Skead3
305,000
(305,000)
-
-
-
975,000
(305,000)
-
-
670,000
1
On 30 September 2022, 180,000 options which were granted on 8 November 2019 had vested. These remain exercisable at 30 June 2023 and at the date of this report.
2
On 30 September 2022, 160,000 options which were granted on 8 November 2019 had vested. These remain exercisable at 30 June 2023 and at the date of this report.
3
No longer classified as key management personnel effective 1 July 2022.
59
60
Notes to the financial statements
30 June 2024
Note 27. Related party transactions (continued)
Rights
The number of Rights to ordinary shares in the Company held during the financial year by each director and other members of
key management personnel of the Group, including their personally related parties, is set out below:
2024
Balance at
Balance at
Balance at
the start of
commencement
Granted /
the end of
the year
of KMP
Lapsed
Exercised
the year
Rights
C Hummer
-
225,721
-
-
225,721
P Ludemann
228,590
-
400,000
-
628,590
J Lamb
114,295
-
300,000
-
414,295
342,885
225,721
700,000
-
1,268,606
All Rights on issue remain unvested as at 30 June 2024.
2023
Balance at
Balance at
Balance at
the start of
commencement
Granted /
the end of
the year
of KMP
Lapsed
Exercised
the year
Rights
P Ludemann
228,590
-
-
-
228,590
J Lamb
114,295
-
-
-
114,295
C Skead1
114,295
(114,295)
-
-
-
457,180
(114,295)
-
-
342,885
1
No longer classified as key management personnel effective 1 July 2022.
All Rights on issue remain unvested as at 30 June 2023.
Transactions with related parties
During the reporting period, the Group leased business premises from a KMP member. The lease expires on 28 February 2026
with no renewal options. Rent payments for FY2024 totalled $299,569 (2023: $276,276), with a lease liability of $503,859
outstanding at 30 June 2024 (2023: $443,789).
The Group also engaged in consulting services of $126,000 from a KMP member which has been included as part of the FY2024
short term benefits disclosed in note 26 (2023: $102,773).
Receivable from and payable to related parties
There were no trade receivables from related parties at the current reporting date (2023: $nil).
Loans to/from related parties
At 30 June 2024 and 30 June 2023, there were no loans to and/or from related parties.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
61
Notes to the financial statements
30 June 2024
Note 28. Financial instruments
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and interest rate
risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses derivative financial
instruments such as forward foreign exchange contracts to hedge certain risk exposures. Derivatives are exclusively used for
hedging purposes, i.e. not as trading or other speculative instruments. The Group uses different methods to measure different
types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and
other price risks and ageing analysis for credit risk.
Risk management is carried out by senior finance executives (“finance”) under policies approved by the Board of Directors. These
policies include identification and analysis of the risk exposure of the Group and appropriate procedures, controls and risk limits.
Finance identifies, evaluates and hedges financial risks within the Group's operating units. Finance reports to the Board on a
monthly basis.
The Group holds the following financial instruments:
Note
2024
2023
$‘000
$‘000
Financial assets
Cash and cash equivalents (a)
9
38,886
33,040
Trade and other receivables (a)
10
74,440
76,743
Other financial assets (a)
12
2,316
2,822
Forward foreign exchange contract asset (b)
-
271
115,642
112,876
Financial liabilities
Trade and other payables (c)
16
103,630
83,055
Borrowings (c)
17
91,064
93,246
Lease liabilities (c)
18
86,483
66,902
Forward foreign exchange contract liability (b)
157
-
281,334
243,203
(a) Financial assets at amortised cost
(b) Forward foreign exchange contract assets/liabilities at fair value through profit and loss
(c) Other financial liabilities at amortised cost
Market risk
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through foreign
exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities
denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and cash flow
forecasting.
62
Notes to the financial statements
30 June 2024
Note 28. Financial instruments (continued)
In order to protect against exchange rate movements, the Group has entered into forward foreign exchange contracts. These
contracts are hedging highly probable forecasted cash flows for the ensuing financial year. Most of the Group’s transactions are
carried out in AUD. Exposures to currency exchange rates arise from the Group’s overseas purchases, which are primarily
denominated in US Dollars (“USD”). To mitigate the Group’s exposure to foreign currency risk, non-AUD cash flows are monitored,
and forward exchange contracts are entered into in accordance with the Group’s risk management policies. The usual length of
forward contracts entered into are short term and cover known USD exposures. Where the amounts to be paid and received in a
specific currency are expected to largely offset one another, no further hedging activity is undertaken.
At 30 June 2024, the Group had forward foreign exchange contracts to acquire USD $48,847,000 (2023: USD $25,916,000). These
are due to mature within 7 months of balance date. The fixed exchange rates on these contracts ranged from 0.5894 to 0.6750
(2023: 0.6078 to 0.6800).
The Group's exposure to foreign currency risk at the end of the reporting period, expressed in AUD, was as follows:
2024
2023
$’000
$’000
Cash
77
10
Trade payables
(71,783)
(34,761)
Buy foreign currency (held for trading)
(157)
271
(71,863)
(34,480)
AUD strengthened
AUD weakened
2024
% change
Effect on
profit before
tax
Effect on
equity
% change
Effect on
profit before
tax
Effect on
equity
USD
10%
6,533
4,573
10%
(7,985)
(5,589)
AUD strengthened
AUD weakened
2023
% change
Effect on
profit before
tax
Effect on
equity
% change
Effect on
profit before
tax
Effect on
equity
USD
10%
3,135
2,194
10%
(3,831)
(2,682)
The percentage change is the expected overall volatility of the significant currencies, which is based on management's assessment
of reasonable possible fluctuations. The actual foreign exchange gain for the year ended 30 June 2024 was $751,000 (2023: loss of
$1,989,000).
63
Notes to the financial statements
30 June 2024
Note 28. Financial instruments (continued)
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The Group's main interest rate risk arises from long-term borrowings. Borrowings obtained at variable rates expose the Group to
interest rate risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk.
As at the reporting date, the Group had the following variable rate borrowings outstanding:
2024
2023
$'000
$'000
Bank overdraft
680
461
Bank facility*
90,846
93,117
Net exposure to cash flow interest rate risk
91,526
93,578
*Bank facility disclosed above does not include capitalised loan establishment fees.
An analysis by remaining contractual maturities in shown in 'liquidity risk below.
The outstanding bank facility at 30 June 2024, totalling $90,846,000, is comprised of a trade finance facility ($68,346,000) and a
loan ($22,500,000) (2023: $93,117,000 bank facility). An official increase/decrease in interest rates of 100 (2023: 100) basis points
would have an adverse/favourable effect on profit before tax of $908,000 (2023: $931,000) per annum. The percentage change is
based on the expected volatility of interest rates using market data and analysts’ forecasts. Minimum principal repayments of
$4,500,000 (2023: $4,500,000) are due during the subsequent 12-month period.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
The Group has a strict code of credit, including obtaining agency credit information, confirming references and setting appropriate
credit limits. The Group obtains guarantees where appropriate to mitigate credit risk. The maximum exposure to credit risk at the
reporting date to recognised financial assets is the carrying amount, net of any provisions for impairment of those assets, as
disclosed in the statement of financial position and notes to the financial statements. The Group does not hold any collateral.
The Group has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables through the
use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered representative across all
customers of the Group based on recent sales experience, historical collection rates and forward-looking information that is
available.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include the
failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual payments for a
period greater than 1 year.
Cash and cash equivalents are held with Commonwealth Bank of Australia, ASB Bank (New Zealand) and Nedbank Limited (South
Africa), all of which has a short-term Standard & Poor’s credit rating of A-1+.
Credit risk for derivative financial instruments arises from the potential failure by counterparties to the contract to meet their
obligations. The credit risk exposure to forward exchange contracts is the net fair value of these contracts.
The credit risk for net investment in leases relates to the ability of the lessee to pay the contractual cash flows stipulated within
the lease.
64
Notes to the financial statements
30 June 2024
Note 28. Financial instruments (continued)
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash equivalents) and
available borrowing facilities to be able to pay debts as and when they become due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously
monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
Financing arrangements
Unused borrowing facilities at the reporting date:
2024
2023
$'000
$'000
Bank overdraft
2,500
2,500
Bank facility
7,892
7,452
Bank guarantee
2,438
1,723
12,830
11,675
The bank overdraft facility trade finance facility may be drawn at any time and terminates on 30 September 2027. The bank
guarantee facilities may be drawn at any time and have a weighted average maturity of 4.53 years (2023: 3.02 years).
Remaining contractual maturities
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The tables have been
drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities
are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and
therefore these totals may differ from their carrying amount in the Statement of financial position.
1 year or less
Between 1 and
2 years
Between 2
and 5 years
Over 5 years
Remaining
contractual
maturities
2024
$'000
$'000
$'000
$'000
$'000
Non-derivatives
Non-interest bearing
Trade and other payables
103,630
-
-
-
103,630
Interest-bearing - variable
Bank overdraft
680
-
-
-
680
Bank facility
8,544
8,343
85,489
-
102,376
Interest-bearing - fixed rate
Lease liability
22,719
17,918
36,381
27,049
104,067
Total non-derivatives
135,573
26,261
121,870
27,049
310,753
Derivative liability/(asset)
Forward foreign exchange contracts net
settled
157
-
-
-
157
Total derivatives
157
-
-
-
157
65
Notes to the financial statements
30 June 2024
Note 28. Financial instruments (continued)
1 year or less
Between 1 and
2 years
Between 2
and 5 years
Over 5 years
Remaining
contractual
maturities
2023
$'000
$'000
$'000
$'000
$'000
Non-derivatives
Non-interest bearing
Trade and other payables
80,455
-
-
-
80,455
Deferred consideration
2,600
-
-
-
2,600
Interest-bearing - variable
Bank overdraft
461
-
-
-
461
Bank facility
8,438
8,248
87,675
-
104,361
Interest-bearing - fixed rate
Lease liability
16,758
14,461
27,133
13,786
72,138
Total non-derivatives
108,712
22,709
114,808
13,786
260,015
Derivative liability/(asset)
Forward foreign exchange contracts net
settled
(271)
-
-
-
(271)
Total derivatives
(271)
-
-
-
(271)
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
Note 29. Fair value measurement
Fair value hierarchy
The following tables detail the Group's assets and liabilities, measured or disclosed at fair value, using a three-level hierarchy, based
on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
or indirectly
Level 3: Unobservable inputs for the asset or liability
Level 1
Level 2
Level 3
Total
2024
$'000
$'000
$'000
$'000
Forward foreign exchange contracts - derivatives
-
157
-
157
Total liabilities
-
157
-
157
Level 1
Level 2
Level 3
Total
2023
$'000
$'000
$'000
$'000
Forward foreign exchange contracts - derivatives
-
271
-
271
Total assets
-
271
-
271
There were no transfers between levels during the financial year.
66
Notes to the financial statements
30 June 2024
Note 29. Fair value measurement (continued)
The carrying amounts of cash, trade and other receivables and trade and other payables are assumed to approximate their fair
values due to their short-term nature. The carrying amounts of borrowings and lease liabilities are assumed to approximate their
fair values given they were entered into at market rates and the borrowings are at variable rates.
Valuation techniques for fair value measurements categorised within level 2 and level 3
Derivative financial instruments have been valued using third party quoted rates, adjusted as appropriate. This valuation technique
maximises the use of observable market data where it is available and relies as little as possible on entity specific estimates.
Note 30. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Pitcher Partners, the auditor of the
Company, and its network firms:
2024
2023
$
$
Audit services - Pitcher Partners
Audit or review of the financial statements
354,046
350,000
Other services - Pitcher Partners
Transaction services
93,960
-
Tax compliance services
34,850
36,670
128,810
36,670
Total remuneration of services provided by Pitcher Partners
482,856
386,670
Audit services - network firms
Audit or review of the financial statements
14,212
8,565
Other services - network firms
Tax compliance services
23,343
22,809
23,343
22,809
Total remuneration of services provided by Pitcher Partner’s
network firms
37,555
31,374
Note 31. Contingent liabilities
The Group has given bank guarantees as at 30 June 2024 of $7,562,000 (2023: $8,277,000) to various landlords and suppliers for
standby letters of credit.
67
Notes to the financial statements
30 June 2024
Note 32. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with
the accounting policy described in note 2:
Ownership interest
Principal place of business /
2024
2023
Name
Country of incorporation
%
%
National Tyre & Wheel Pty Ltd (formerly “Exclusive
Tyres Distributors Pty Ltd”)
Australia
100%
100%
Dynamic Wheel Co. Pty Limited
Australia
100%
100%
ACN 117 639 040 Pty Ltd (formerly “Integrated OE Pty
Ltd”)
Australia
100%
100%
Statewide Tyre Distribution Pty Ltd
Australia
100%
100%
ACN 642 540 690 Pty Ltd (formerly ”Tyres4U Pty Ltd”)
Australia
100%
100%
Tyreright Operations Pty Ltd
Australia
100%
100%
Black Rubber Pty Ltd
Australia
100%
100%
Black Rubber Sydney Pty Ltd
Australia
100%
100%
Solid Plus Operations Pty Ltd
Australia
100%
100%
NTAW Logistics Pty Ltd
Australia
100%
100%
NTAW Holdings (NZ) Ltd
New Zealand
100%
100%
Exclusive Tyres Distributors (NZ) Limited
New Zealand
100%
100%
Tyres4U (NZ) Ltd
New Zealand
100%
100%
Carters Tyre Service Limited
New Zealand
100%
100%
C.O. Tire & Retreading Co Limited
New Zealand
100%
100%
Tyre Distributors New Zealand Limited
New Zealand
100%
100%
Top Draw Tyres Proprietary Limited
South Africa
50%
50%
Top Draw Tyres Proprietary Limited’s (“TLS”) principal place of business First Floor, 25 Village Road, Kloof, 2640, South Africa. The
non-controlling interest holds 50% ownership of TLS and has 50% of voting rights. No dividends have been paid to NTAW Holdings
or the non-controlling interest. The loss allocated to the NCI during the reporting period was $321,000 (2023: $436,000 loss). The
accumulated non-controlling interest at 30 June 2024 totalled $2,753,000 (2023: $3,074,000).
Set out below is supplementary financial information about Top Draw Tyres Proprietary Limited:
2024
2023
$’000
$’000
Statement of profit or loss and other comprehensive income
Revenue
10,843
9,749
(Loss)/profit after income tax
(642)
(872)
Total comprehensive income
(642)
(872)
Statement of financial position
Total current assets
5,362
10,079
Total non-current assets
379
384
Total current liabilities
2,035
6,239
Total non-current liabilities
33
33
Total equity
3,673
4,191
68
Notes to the financial statements
30 June 2024
Note 33. Parent entity information
Set out below is the supplementary information about the parent entity.
Parent Entity
2024
2023
$’000
$’000
Statement of profit or loss and other comprehensive income
(Loss)/profit after income tax
(3,505)
295
Total comprehensive income
(3,505)
295
Statement of financial position
Total current assets
7,384
5,372
Total assets
194,031
204,899
Total current liabilities
6,960
11,116
Total liabilities
93,603
103,559
Equity
Issued capital
94,569
93,122
Reserves
1,948
920
Retained earnings
3,911
7,298
Total equity
100,428
101,340
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had a deed of cross guarantee in place in relation to certain subsidiaries at 30 June 2024 and 30 June 2023. Refer
to note 34.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2024 and 30 June 2023.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2024 and 30 June 2023.
Material accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 2, except for the
following:
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
69
Notes to the financial statements
30 June 2024
Note 34. Deed of cross guarantee
The following entities are party to a deed of cross guarantee under which each company guarantees the debts of the others:
National Tyre & Wheel Limited;
Exclusive Tyres Distributors Pty Ltd;
Dynamic Wheel Co. Pty Limited;
ACN 117 639 040 Pty Ltd (formerly “Integrated OE Pty Ltd”);
Statewide Tyre Distribution Pty Ltd;
ACN 642 540 690 Pty Ltd (formerly ”Tyres4U Pty Ltd”);
Tyreright Operations Pty Ltd;
Black Rubber Pty Ltd;
Black Rubber Sydney Pty Ltd;
Solid Plus Operations Pty Ltd;
NTAW Logistics Pty Ltd;
NTAW Holdings (NZ) Ltd;
Exclusive Tyres Distributors (NZ) Limited;
Tyres4U (NZ) Ltd;
Carters Tyre Service Limited;
C.O. Tire & Retreading Co Limited; and
Tyre Distributors New Zealand Limited.
By entering into the deed, the Australian wholly owned entities have been relieved from the requirement to prepare financial
statements and directors' report under Corporations Instrument 2016/785 issued by the Australian Securities and Investments
Commission.
The above companies represent a 'Closed Group' for the purposes of the Corporations Instrument, and as there are no other parties
to the deed of cross guarantee that are controlled by National Tyre & Wheel Limited, they also represent the 'Extended Closed
Group'.
70
Notes to the financial statements
30 June 2024
Note 34. Deed of cross guarantee (continued)
Set out below is a consolidated statement of profit or loss and other comprehensive income and statement of financial position of
the 'Closed Group'.
Closed Group
2024
2023
Statement of profit or loss and other comprehensive income
$'000
$'000
Revenue
522,588
572,535
Other income
1,935
327
Cost of goods sold
(355,524)
(409,917)
Employee benefits and other related costs
(85,292)
(83,365)
Depreciation and amortisation
(25,726)
(23,991)
Occupancy
(7,374)
(7,714)
Computer and software costs
(7,099)
(6,655)
Motor vehicle costs
(5,518)
(6,598)
Marketing
(5,042)
(4,786)
Insurance
(4,289)
(4,004)
Professional fees and acquisition costs
(2,114)
(2,084)
Other
(11,494)
(10,672)
Finance costs
(11,019)
(8,349)
Profit before income tax expense
4,032
4,727
Income tax expense
(2,148)
(960)
Profit after income tax expense
1,884
3,767
Other comprehensive income
Foreign currency translation
309
856
Other comprehensive income for the year, net of tax
309
856
Total comprehensive income for the year
2,193
4,623
Equity – retained earnings
Retained earnings at the beginning of the financial year
20,923
15,897
Profit after income tax expense
1,884
3,767
Dividends paid
-
(1,981)
Opening retained earnings of entities joining the Closed Group
-
3,240
Retained earnings at the end of the financial year
22,807
20,923
71
Notes to the financial statements
30 June 2024
Note 34. Deed of cross guarantee (continued)
Closed Group
2024
2023
Statement of financial position
$'000
$'000
Current assets
Cash and cash equivalents
38,437
32,681
Trade and other receivables
73,234
75,153
Inventories
145,951
121,688
Other financial assets
1,573
1,537
Prepayments
3,522
4,094
Current tax asset
-
-
262,717
235,153
Non-current assets
Property, plant and equipment
16,622
16,468
Right-of-use assets
79,260
61,210
Intangible assets
48,054
51,265
Other financial assets
4,907
5,712
148,843
134,655
Total assets
411,560
369,808
Current liabilities
Trade and other payables
102,328
77,348
Borrowings
4,500
4,500
Lease liabilities
18,510
15,895
Provisions
10,209
11,265
Other financial liabilities
157
-
Current tax liability
180
129
135,884
109,137
Non-current liabilities
Borrowings
85,883
88,285
Lease liabilities
67,973
51,000
Provisions
2,233
2,250
Deferred tax
1,824
3,837
157,913
145,372
Total liabilities
293,797
254,509
Net assets
117,763
115,299
Equity
Issued capital
94,569
94,068
Reserves
387
308
Retained earnings
22,807
20,923
Total equity
117,763
115,299
72
Notes to the financial statements
30 June 2024
Note 35. Events after the reporting period
On 17 July 2024, Black Rubber entered into an asset sale agreement to purchase the assets, inventory and plant & equipment, of a
tyre retreading plant located in Brooklyn, Melbourne, Victoria from Goodyear & Dunlop Tyres (Aust) Pty Ltd. Completion of this
agreement is subject to certain conditions.
On 8 August 2024, Black Rubber entered into an asset sale agreement to purchase the assets, inventory and plant & equipment,
of a commercial tyre retail store located in Wingfield, Adelaide, South Australia from Goodyear & Dunlop Tyres (Aust) Pty Ltd.
Completion of this agreement is subject to certain conditions.
No other matter or circumstance has arisen since 30 June 2024 that has significantly affected, or may significantly affect the Group's
operations, the results of those operations, or the Group's state of affairs in future financial years.
73
Consolidated entity disclosure statement
30 June 2024
Body corporates
Tax residency
Entity name
Entity type
Place formed or
incorporated
% of share
capital held
Australian
or foreign
Foreign
Jurisdiction
NTAW Holdings Limited
Body Corporate
Australia
N/A
Australia
N/A
National Tyre & Wheel Pty Ltd
(formerly “Exclusive Tyre
Distributors Pty Ltd”)
Body corporate
Australia
100%
Australia
N/A
Exclusive Tyre Distributors (NZ)
Limited*
Body corporate
New Zealand
100%
Australia
New Zealand
Dynamic Wheel Co. Pty Limited
Body corporate
Australia
100%
Australia
N/A
Statewide Tyre Distribution Pty
Ltd
Body corporate
Australia
100%
Australia
N/A
Top Draw Tyres Proprietary
Limited
Body corporate
South Africa
50%
Foreign
South Africa
Tyres4U (NZ) Limited*
Body corporate
New Zealand
100%
Australia
New Zealand
Tyreright Operations Pty Ltd
Body corporate
Australia
100%
Australia
N/A
Black Rubber Pty Ltd
Body corporate
Australia
100%
Australia
N/A
Black Rubber Sydney Pty Ltd
Body corporate
Australia
100%
Australia
N/A
Carters Tyre Service Limited*
Body corporate
New Zealand
100%
Australia
New Zealand
C.O. Tire & Retreading Co
Limited*
Body corporate
New Zealand
100%
Australia
New Zealand
Tyre Distributors New Zealand
Limited*
Body corporate
New Zealand
100%
Australia
New Zealand
Solid Plus Operations Pty Ltd
Body corporate
Australia
100%
Australia
N/A
ACN 117 639 040 Pty Ltd
(formerly “Integrated OE Pty
Ltd”)
Body corporate
Australia
100%
Australia
N/A
ACN 642 540 690 Pty Ltd
(formerly ”Tyres4U Pty Ltd”)
Body corporate
Australia
100%
Australia
N/A
NTAW Logistics Pty Ltd
Body corporate
Australia
100%
Australia
N/A
NTAW Holdings (NZ) Limited*
Body corporate
New Zealand
100%
Australia
New Zealand
*Body corporates are tax residents of Australia and New Zealand.
Basis of preparation
The consolidated entity disclosure statement has been prepared in accordance with subsection 295(3A)(a) of the
Corporations Act 2001. The entities listed in the statement are NTAW Holdings Limited and all the entities it controls in
accordance with AASB 10 Consolidated Financial Statements.
The percentage of share capital disclosed for bodies corporate included in the statement represent the economic
interest in the consolidated financial statements.
In developing the disclosures in the statement, the Directors have applied current legislation and where available judicial
precedent in the determination of Australian or foreign tax residency.
At the end of the financial year, no entity within the consolidated entity was a trustee of a trust within the consolidated
entity, a partner in a partnership within the consolidated entity, or a participant in a joint venture with the consolidated
entity.
74
Notes to the financial statements
30 June 2024
74
In the directors' opinion:
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 2 to the financial statements;
the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June 2024
and of its performance for the financial year ended on that date;
the information disclosed in the attached consolidated entity disclosure statement is true and correct as at 30 June 2024;
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable; and
at the date of this declaration, there are reasonable grounds to believe that the members of the Extended Closed Group
will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross
guarantee described in note 34 to the financial statements.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
On behalf of the directors
_______________________
Murray Boyte
Chairman
27 August 2024
Brisbane
Directors’ declaration
30 June 2024
75
75
Level 38, 345 Queen Street
Brisbane, QLD 4000
Postal address
GPO Box 1144
Brisbane, QLD 4001
+61 7 3222 8444
pitcher.com.au
Adelaide | Brisbane | Melbourne | Newcastle | Perth | Sydney
Nigel Fischer
Mark Nicholson
Peter Camenzuli
Jason Evans
Kylie Lamprecht
Norman Thurecht
Brett Headrick
Warwick Face
Cole Wilkinson
Simon Chun
Jeremy Jones
Tom Splatt
James Field
Daniel Colwell
Robyn Cooper
Felicity Crimston
Cheryl Mason
Kieran Wallis
Murray Graham
Andrew Robin
Karen Levine
Edward Fletcher
Robert Hughes
Ventura Caso
Tracey Norris
Pitcher Partners is an association of independent firms. An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme approved under Professional Standards
Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.
Independent Auditor’s Report to the Members of NTAW Holdings Limited (formerly called National
Tyre & Wheel Limited)
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of NTAW Holdings Limited (formerly called National Tyre & Wheel
Limited) (“the Company”) and its controlled entities (“the Group”), which comprises the consolidated
statement of financial position as at 30 June 2024, the consolidated statement of profit or loss and other
comprehensive income, the consolidated statement of changes in equity and the consolidated statement of
cash flows for the year then ended, and notes to the financial statements including material accounting policy
information, the consolidated entity disclosure statement and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
(a)
giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its financial
performance for the year then ended; and
(b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of
the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards
Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (“the
Code”) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given
to the directors of the Company, would be in the same terms if given to the directors as at the time of this
auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial report of the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
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Key Audit Matter
How our audit addressed the key audit matter
Impairment of goodwill and separately identifiable intangible assets
Refer to Note 15: Intangible assets
As part of business combinations completed during
prior years, the Group recognised goodwill and
other intangible assets valued at $29.191 million
and $18.863 million respectively.
These intangible assets relate to the acquisition of
various subsidiaries of NTAW Holdings Limited, with
these subsidiaries being the basis of management’s
determination of Cash-Generating Units (“CGU”) in
the Group.
The carrying amount of goodwill and the intangible
assets is supported by value-in-use calculations
prepared by management which are based on
budgeted future cash flows, key estimates and
significant judgements such as the annual growth
rates, discount rate and terminal value growth rate.
This is a key area of audit focus as the value of the
intangible assets is material and the evaluation of
the recoverable amount of these assets requires
significant judgement in determining the key
estimates supporting the expected future cash flows
of the CGUs and the utilisation of the relevant
assets.
Our procedures included:
Understanding and evaluating the design and
implementation of management’s processes and
controls over the impairment assessment
process;
Assessing and evaluating management’s
determination of the Group’s CGUs based on our
understanding of the nature of the Group’s
business and the identifiable groups of cash
generating assets;
Comparing the cash flow forecasts used in the
value-in-use calculations to Board approved
budgets for the 2025 financial year and the
Group’s historic actual performance;
Assessing and evaluating the significant
judgements and key estimates used for the
impairment assessment, in particular, the annual
growth rates, discount rate and terminal value
growth rate;
Checking the mathematical accuracy of the
impairment testing model and agreeing relevant
data to the latest budgets;
Performing sensitivity analysis by varying
significant judgements and key estimates,
including the annual growth rates, discount rate
and terminal value growth rate, for the CGUs to
which goodwill and indefinite useful life intangible
assets relate; and
Assessing the adequacy of the Group’s
disclosures in respect of impairment testing of
goodwill and indefinite useful life intangible
assets.
Revenue recognition
Refer to Note 5: Revenue
The Group’s revenue, $533.431 million, is primarily
derived from the sale of product through retail and
wholesale channels, domestically and
internationally.
We focused on the existence, cut-off and
appropriate recognition of both settled and unsettled
(trade debtors) revenue as a key audit matter as
revenue is a key contributor to the determination of
profit.
Our procedures included:
Understanding and evaluating the design
and implementation of controls and
processes for recognising and recording
revenue transactions;
Testing the existence of revenue by
agreeing a sample of revenue transactions
to supporting documentation;
Testing the cut-off of revenue by agreeing a
sample of outstanding debtor invoices to
delivery information and by testing a sample
of credit notes issued post year-end;
Assessing the adequacy and accuracy of
the disclosures in the financial statements.
Pitcher Partners is an association of independent firms. An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme
approved under Professional Standards Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the
members of which are separate and independent legal entities.
77
Pitcher Partners is an association of independent firms. An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme
approved under Professional Standards Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the
members of which are separate and independent legal entities.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s directors’ report which was obtained as at the date of our audit report, and any
additional other information included in the Group’s annual report for the year ended 30 June 2024, but does
not include the financial report and our auditor’s report thereon. The Group’s annual report is expected to be
made available to us after the date of this auditor's report.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
When we read the annual report, if we conclude that there is a material misstatement therein, we are required
to communicate the matter to the directors and use our professional judgment to determine the appropriate
action to take.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of:
(a) the financial report (other than the consolidated entity disclosure statement) that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001; and
(b) the consolidated entity disclosure statement that is true and correct in accordance with the
Corporations Act 2001; and
(c) for such internal control as the directors determine is necessary to enable the preparation of:
(i) the financial report (other than the consolidated entity disclosure statement) that gives a true and
fair view and is free from material misstatement, whether due to fraud or error; and
(ii) the consolidated entity disclosure statement that is true and correct and is free of misstatement,
whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or
have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with the Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
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Pitcher Partners is an association of independent firms. An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme
approved under Professional Standards Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the
members of which are separate and independent legal entities.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Group to cease to continue as a going
concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are responsible
for the direction, supervision and performance of the Group audit. We remain solely responsible for
our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats
or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
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Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 11 to 20 of the directors’ report for the year
ended 30 June 2024. In our opinion, the Remuneration Report of NTAW Holdings Limited (formerly called
National Tyre & Wheel Limited), for the year ended 30 June 2024, complies with section 300A of the
Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
PITCHER PARTNERS
ANDREW ROBIN
Partner
Brisbane, Queensland
27 August 2024
The shareholder information set out below was applicable as at 15 August 2024.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
Number
% of total
of holders
shares
of ordinary
issued
shares
1 to 1,000
245
0.1
1,001 to 5,000
439
0.9
5,001 to 10,000
238
1.4
10,001 to 100,000
471
11.2
100,001 and over
119
86.4
1,512
100.0
Holding less than a marketable parcel
275
0.0
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
% of total
shares
Number held
issued
ST Corso Pty Ltd
27,307,594
20.36
EM Australia 2021 Pty Ltd (The TWA A/C)
10,697,389
7.98
Sandhurst Trustees Ltd (Collins St Value Fund A/C)
10,313,488
7.69
Strategic Value Pty Ltd (Tal Super A/C)
6,067,482
4.52
BNP Paribas Nominees Pty Ltd (IB AU Noms Retailclient)
3,834,731
2.86
Citicorp Nominees Pty Limited
3,623,614
2.70
Mr Roshan Charles Chelvaratnam
3,133,076
2.34
Mr Stephen Criag Jermyn (Jermyn Family S/Fund A/C)
3,000,000
2.24
Micpip Nominees Pty Ltd (Micpip Super Fund A/C)
2,929,133
2.18
Mr John Peter Ludemann
2,643,884
1.97
SCJ Pty Limited (Jermyn Family A/C)
2,502,952
1.87
J.P. Morgan Nominees Australia Pty Ltd
2,250,859
1.68
National Nominees Limited
2,119,900
1.58
Exldata Pty Ltd
2,096,208
1.56
Exldata Pty Ltd
1,699,788
1.27
HSBC Custody Nominees (Australia) Limited
1,395,097
1.04
Mr Christopher John Hummer
1,338,560
1.00
Mrs Christine Lorraine Hummer
1,071,152
0.78
Mrs Christine Lorraine Hummer
1,048,928
0.78
Mr Christopher John Hummer
1,048,928
0.76
90,122,763
67.16
Shareholder information
30 June 2024
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Unquoted equity securities
There are 2,110,000 unquoted unissued ordinary shares of NTAW Holdings Limited under option at the date of this report. There
are 2,703,781 unquoted rights to unissued ordinary shares of NTAW Holdings Limited at the date of this report.
Substantial holders
Substantial holders in the Company are set out below:
Ordinary shares
% of total
shares
Number held
issued
ST Corso Pty Ltd atf the Smith Trading Trust, Terence Smith & Susanne Smith (together
Smith Group)
27,891,171
20.79
Anthony Young
11,820,714
8.81
EM Australia 2021 Pty Ltd (TWA A/C)
10,697,389
7.98
Sandhurst Trustees Ltd (Collins St Value Fund A/C)
10,313,488
7.69
Ryan Young
10,150,697
7.57
Tynan Young
7,460,609
5.56
Voting rights
The voting rights attached to ordinary shares are by way of a poll each share shall have one vote at a meeting.
There are no other classes of equity securities on issue at the date of this report.
There are no equity securities subject to voluntary escrow at the date of this report.
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Shareholder information
30 June 2024
Directors
Murray Boyte - Chairman
Peter Ludemann - Managing Director and Chief Executive Officer
Terry Smith
Kenneth Gunderson-Briggs
Christopher Hummer
Tynan Young
Company secretaries
Jason Lamb
Hugh McMurchy
Registered office and principal
place of business
Level 2
385 MacArthur Avenue
Hamilton QLD 4007
Telephone: (07) 3212 0950
Facsimile: (07) 3212 0951
Share register
Computershare Investor Services Pty Limited
Level 1
200 Mary Street
Brisbane QLD 4000
Telephone: 1300 787 272
Auditor
Pitcher Partners
Level 38
345 Queen Street
Brisbane QLD 4000
Solicitors
Bentleys Legal (NSW)
Level 14
60 Margaret Street
Sydney NSW 2000
Bankers
Commonwealth Bank of Australia
Ground Floor, Tower 1
201 Sussex Street
Sydney NSW 2000
Stock exchange listing
NTAW Holdings Limited shares are listed on the Australian Securities Exchange (ASX code:
NTD)
Website
https://ntawholdings.com.au
Corporate Governance
Statement
The Company’s directors and management are committed to conducting the Group’s business
in an ethical manner and in accordance with the highest standards of corporate governance.
The Company has adopted and substantially complies with the ASX Corporate Governance
Principles and Recommendations (4th Edition) (“Recommendations”) to the extent
appropriate to the size and nature of the Group’s operations.
The Company has prepared a Corporate Governance Statement which sets out the corporate
governance practices that were in operation since listing, identifies any Recommendations
that have not been followed, and provides reasons for not following such Recommendations.
The Company’s Corporate Governance Statement and policies, which is approved at the same
time as the Annual Report, can be found on its website:
Corporate directory
30 June 2024
82