ANNUAL RESULTS 2017/18
OUR BUSINESS Member-based buying and marketing group that supplies its rural and peri-urban customers with a range of rural merchandise and animal feeds via a network of 8 warehouses nationally or on a direct basis (supplied direct from the supplier to customer). Provides members access to thousands of products from more than 650 suppliers. AIRR’s focus on local services and having 8 strategically located warehouses carrying approximately 6,000 products offering a one-stop shop to support independent retailers. 2
OUR LOCATIONS BRISBANE TAMWORTH WAGGA WAGGA SYDNEY ADELAIDE PERTH SHEPPARTON MELBOURNE DISTRIBUTION & SALES CENTRES Each distribution centre has its own dedicated sales, operations & customer service team. 3
OUR PEOPLE BOARD OF DIRECTORS CRAIG FARROW PETER LAW GLEN PEARSALL Non Executive Chairman Managing Director / CEO Non Executive Director LACHLAN COX GRAEME JOLLY Non Executive Director Non Executive Director 4
OUR PEOPLE MANAGEMENT PETER LAW KRISTEN PICKERING DAVE SCHELLING Managing Director / CEO CFO / Company Secretary General Manager Supplier Relations PETER LOUREY KANE LAW General Manager General Manager Group Sales & Purchasing Group Marketing 5
OUR MEMBERS & CUSTOMERS NATIONAL RETAIL BRANDS: Larger mixed rural Pet, equine and small animal feed merchandise retailers + healthcare retailers Over 240 locations nationwide Over 180 locations nationwide 6
OUR BRANDS Private label range of agricultural chemicals 147 product registrations and growing Over 230 SKUs currently in distribution & retail 7
OUR BRANDS Our General Merchandise, Feed & Animal Health ‘Independents Own (iO)’ private label range Now exceeding 200 SKUs 8
OPERATING PERFORMANCE Continued growth in Revenue and Profitability, driving Balance Sheet, shareholder rewards and future opportunities Statement of Profit & Other Comprehensive Income for year ended 30 June 2018 Consolidated Consolidated Parent Entity Parent Entity Group Group 30-Jun 30-Jun 30-Jun 30-Jun 2018 2017 2018 2017 $'000 $'000 $'000 $'000 Consolidated Revenue 366,714 359,446 11,636 10,469 Profit before income tax 19,752 17,580 11,592 10,448 5,899 5,272 690 651 Income tax expense Profit for the year after income tax 13,853 12,308 10,902 9,797 Basic earnings per share 0.96 0.85 0.68 0.49 9
OPERATING PERFORMANCE CONSOLIDATED SALES REVENUE 2012 289,358,881 2013 269,755,416 2014 285,743,082 2015 290,568,144 2016 336,378,663 2017 351,354,932 2018 358,315,837 Revenue 400,000,000 350,000,000 300,000,000 250,000,000 200,000,000 2012 2013 2014 2015 2016 2017 2018 10
OPERATING PERFORMANCE CONSOLIDATED NPAT 2012 6,741,836 2013 4,661,905 2014 6,281,673 2015 7,281,699 2016 9,580,216 2017 12,307,507 2018 13,853,009 Consolidated NPAT 14,000,000 10,500,000 7,000,000 3,500,000 - 11 2012 2013 2014 2015 2016 2017 2018
OPERATING PERFORMANCE Warehouse Sales 2014 2015 2016 2017 2018 Shepparton 29,414,261 27,687,208 33,891,606 32,653,473 30,321,596 Brisbane 32,559,798 32,531,001 43,979,213 47,750,978 47,977,389 Tamworth 10,799,729 10,428,151 14,942,232 16,581,042 15,345,587 Port Adelaide 23,270,431 21,347,414 23,641,860 25,753,084 21,947,864 Perth 10,479,066 10,768,541 21,202,692 21,486,807 23,879,083 Wagga Wagga 9,547,929 10,668,745 13,082,833 15,126,060 14,333,845 Melbourne 21,895,582 24,570,684 28,135,488 27,890,751 30,419,044 Sydney 8,415,832 11,395,448 13,054,144 13,835,794 14,853,225 Feed Barn 2,347,120 5,717,356 4,070,192 4,075,358 4,138,039 Ararat Farm Supplies - - - 639,517 2,271,134 Stawell Farm Supplies - - - 1,409,341 4,167,050 Goondiwindi - - - - 319,723 148,729,748 155,114,548 196,000,260 207,202,205 209,973,579 50,000,000 Shepparton 37,500,000 Brisbane Tamworth Port Adelaide Perth 25,000,000 Wagga Wagga Melbourne Sydney Feed Barn Ararat Farm Supplies 12,500,000 Stawell Farm Supplies Goondiwindi - 2014 2015 2016 2017 2018 12
OPERATING PERFORMANCE State Sales 2014 2015 2016 2017 2018 VIC 88,836,545 90,890,171 93,820,338 95,850,896 100,335,558 NSW 85,848,693 92,296,181 116,953,317 121,087,206 120,432,705 QLD 59,694,250 57,254,181 64,949,702 69,137,994 71,558,053 SA 32,016,818 30,015,499 32,248,532 35,899,646 33,474,310 WA 13,161,048 14,135,298 24,437,374 25,454,203 27,629,199 TAS 8,118,720 8,421,773 6,742,997 7,089,660 8,293,144 287,676,074 293,013,103 339,152,260 354,519,605 361,722,970 140,000,000 105,000,000 VIC NSW QLD 70,000,000 SA WA TAS 35,000,000 - 2014 2015 2016 2017 2018 13
Statement of Financial Position as at 30 June 2018 BALANCE Consolidated Consolidated Parent Entity Parent Entity Group Group 30-Jun 30-Jun 30-Jun 30-Jun 2018 2017 2018 2017 SHEET $'000 $'000 $'000 $'000 ASSETS CURRENT ASSETS Cash and cash equivalents 345 6 - 1 Trade and other receivables 47,719 48,031 - - WORKING Inventories 47,487 44,450 - - Derivative financial instruments 133 178 - - Other 533 183 36,540 32,440 CAPITAL TOTAL CURRENT ASSETS 96,217 92,848 36,540 32,441 NON-CURRENT ASSETS Receivables 684 866 - - Property, plant and equipment 2,322 2,512 - - Strong Balance Sheet Intangibles 2,458 2,439 - - Deferred tax 947 658 2 2 • Solid Equity Position Other - - 1,250 1,250 TOTAL NON-CURRENT ASSETS 6,411 6,475 1,252 1,252 • Disciplined Financial TOTAL ASSETS 102,628 99,323 37,792 33,693 Management LIABILITIES CURRENT LIABILITIES • $3.40 Net Tangible Trade and other payables 34,337 35,375 8 8 Asset backing Borrowings 294 14,525 - - Income tax 1,300 1,814 224 502 per share Employee benefits 1,018 1,011 - - Other 1,758 770 - - • 2.4x Current Ratio 38,707 53,495 232 510 TOTAL CURRENT LIABILITIES • Strong Equity in NON-CURRENT LIABILITIES Borrowings 11,747 782 - - Working Capital Other non-current liability - - - - Deferred tax 160 55 1 1 Employee benefits 229 172 - - TOTAL NON-CURRENT LIABILITIES 12,136 1,009 1 1 50,843 54,504 233 511 TOTAL LIABILITIES 51,785 44,819 37,559 33,182 NET ASSETS EQUITY Issued capital 13,088 13,088 13,088 13,088 Hedge reserve - 362 - - Retained profits 38,697 31,369 24,471 20,094 14 51,785 44,819 37,559 33,182 TOTAL EQUITY
CASHFLOW Statement of Cash Flows for year ended 30 June 2018 Consolidated Consolidated Group Group Parent EnNty Parent EnNty 30-Jun 30-Jun 30-Jun 30-Jun 2018 2017 2018 2017 $'000 $'000 $'000 $'000 Cash flows from operaLng acLviLes 10,578 12,884 - 1,013 - 642 Cash flows from invesLng acLviLes - 448 - 1,065 - - Cash flows from financing acLviLes - 6,599 - 6,438 1,012 642 Net increase in cash and cash equivalents held 3,531 5,381 - 1 - Cash and cash equivalents at the beginning of the financial year - 3,186 - 8,567 1 1 Cash and cash equivalents at the end of the 345 - 3,186 - 1 financial year Positive net cash flow from Operating Activities 15
BANK FACILITIES COMMONWEALTH BANK OF AUSTRALIA BALANCE FACILITY 30 JUNE 2018 Long term bank loan $11m $11m Bank overdraft facility $12m - Trade finance facility $10m - Long term bank loan $10m - $43m $11m Chattel mortgages re equipment As required $1m & vehicle finance Usual foreign exchange facility arrangements to enter into As required $3.3m importation contracts Appropriate debt facilities 16
TOWARDS 400M 1.AIRR & Tuckers Growing member base Increasing loyalty Increase structure around driving sales of member exclusive initiatives – conferences & catalogues 2. Warehousing: Creating sales and margin growth Leverage our buying, marketing & selling strengths 3. Warehouse Footprint Satellite warehouse: Expand AIRR warehouse footprints by creating further satellite warehouses (eg Goondiwindi) 4. Private Labels Increase sales through growing iO product range. Sustained increases in promotion and marketing activity. Create a structured promotion calendar supplied to all staff and members so our plan is set in stone and delivers sales growth 17
TOWARDS 400M 5. Exclusive products, bulk buys and distribution agreements AIRR’s core rural business continues to open doors of opportunity given that AIRR is now the main Rural ‘buyer’ due to ability to commit and its network is the perfect platform to continue the quest to boost our amount of exclusive products and bulk buys 6. Further alignment to top/key suppliers New business opportunities: Through closer partnerships with key suppliers and their want to deal with a flexible, nimble and progressive group (AIRR and members) new business opportunities will arise – especially with new technology or ‘boom’ markets that arise and offer opportunities 18
SHARE VALUATION Consistent with prior years, the Board has received the auditors valuation report, lifting indicative share price from $6.47 to $7.89. KEY DRIVERS APPLIED Estimated Future Maintainable EBITDA $22.6m Net Debt $22.2m Multiplier Range 6.4 to 6.8 Minority Interest Discount 10% This valuation is indicative only and the market will determine the price at which shares trade. 19
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