COVENTRY GROUP LIMITED — AGM Information 2015

Oct 26, 2015

COVENTRY GROUP LIMITED

AGM Chairman’s & CEO Address

27 October 2015

Good morning ladies and gentlemen and welcome to the 79[th] Annual General Meeting of Coventry Group Ltd.

My name is Neil Cathie and I am the Chairman of your Board and this meeting

I would like to introduce the members of the board Ken Perry, Nick Willis, Peter Caughey (MD & CEO) and Vicky Papachristos. Peter and Vicky are new to the board since the last AGM and Nick and I have just celebrated the first anniversary of joining the board. Peter, as most know, was appointed Managing Director and CEO on 1 January 2015 following the handover of management responsibilities from Roger Flynn and Vicky was appointed to fill a casual vacancy following the retirement of Barry Nazer.

My Chairman’s report is contained in the 2015 Annual Report and I don’t intend to repeat that content here. There is much to be done as I state in my report. That said, we do not intend to stay fixated with the past as we, the board and management, set about re-shaping the Company and restoring profitability.

I will now hand over to our CEO Peter Caughey who talk to the F2015 results and provide an update on current initiatives, trading and outlook.

2015 ANNUAL GENERAL MEETING

PETER CAUGHEY CEO & MANAGING DIRECTOR

27 OCTOBER 2015

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FY15 Year in Review

COMPREHENSIVE STRATEGIC REVIEW UNDERTAKEN

1. Refreshed governance – new leadership

2. Restructure underway

3. Net loss before restructure and other associated costs, finance and tax of $6.4m

4. Net loss after restructure costs and tax of $24.6m

5. Reset capital structure (surplus cash distributed, asset write down)

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FY15 Financial summary

GROUP WIDE INITIATIVES IMPLEMENTED TO REMOVE COSTS

($m)	FY14	FY15	% change
Revenue from sale of goods & services	206.2	190.7	-7.5%
EBIT (before restructuring and other related costs)	-0.0	-6.4	NM
Profit/(loss) after tax	1.0	-24.6	NM
Net cash	48.0	8.7	NM
Earnings per share (cents)	1.6	-65.8	NM
Dividend per share (cents)	22.00	35.25	+60.2%
Net Tangible Assets per share ($)	3.47	2.16	-37.8%

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Dividends

DIVIDEND POLICY RESET

Interim/Final Special 25 • $10.9m surplus capital returned to shareholders 20 since July 2014 15 • Future dividends greater emphasis 10 on actual performance, 5 rather than prospect of 0 profits Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Half Year Ending

• Future dividends greater emphasis on actual performance, rather than prospect of profits

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Restructure well advanced

$7M COSTS P.A. REMOVED ADDITIONAL $4M SAVINGS P.A. BY END FY16

ACHIEVED		UNDERWAY
>100 positions removed Distribution centres closed Artia supply chain fully rationalised into Konnect Artia focussed distribution centres closed Import program maturing MSS exited Inventory cleansing complete		1. Konnect branch reconfiguration, relocation and refurbishment 2. Warehouse management system to be implemented by June 2016 3. Targeting $6m reduction in inventory by the June 2016 4. Simplification and consolidation of back office functions 5. Branch expansion

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Plan for the future

COMPETITIVE COST-OF-DOING BUSINESS AND IMPROVED FINANCIAL PERFORMANCE

PORTFOLIO		CAPITAL STRUCTURE		OPERATING MODEL		GROWTH
 Exited MSS  Previously exited furniture		 Surplus cash returned to shareholders  Value of underlying assets reset  Net cash		 Efficient distribution model  Lean overheads		 New locations  New products  New channels  CIP program

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Konnect

CONTINUING TO BUILD A STRONG FOUNDATION FOR GROWTH

• Decreased employee numbers and centralised many functions

• Reinvested in new sales channels (telesales, online, wholesale)

• Transport savings beginning to flow

• Business now better able to withstand challenging market conditions, but still fragile

• Welshpool distribution centre closing November 2016

• 6 stores opened since July 2014

• Investing in training

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Artia

SIGNIFICANT IMPROVEMENT IN EARNINGS DRIVEN BY RESTRUCTURE INITIATIVES

• Exited unprofitable “furniture” category

• Range enhancements

• Continuing products growing

• Cost rationalisation and integration into Konnect supply chain

• • Now profitable YTD

• Positive contributor to Group earnings

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Cooper Fluid Systems

CONTINUES TO BE PROFITABLE DESPITE MINING SECTOR CONTRACTION

• Strong leadership

• Highly competitive market

• Increased focus on repairs & maintenance and non-capital offering

• New business lines

• Growing own brand products – ‘Coopers Built’ range

• New branches

• Dual branches with Konnect operating well

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Gaskets

TRADING CONSISTENTLY

• Consolidated market share as key competitor closed

• Cheap imports and warranty extensions a challenge

• Owned 72.5% by Coventry

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Corporate

SIGNIFICANT OPPORTUNITY TO REDUCE COST STRUCTURE

• Limited number of roles eliminated and duplicated processes removed as part of business unit restructure

• Comprehensive review of corporate underway to be completed in December 2015

• Action plan to be implemented by June 2016

• Expected to deliver material reduction in corporate costs when implemented

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Outlook – FY16

REITERATE GUIDANCE THAT GROUP EXPECTED TO RETURN TO OPERATING PROFITABILITY DURING FY16

• 1Q broadly tracking to plan

• All businesses making a positive contribution (pre-corporate)

• Current trading conditions across all businesses expected to remain throughout FY16

• Restructure program to be completed by the end of 2016

• Revenue growth initiatives to become the primary focus

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Disclaimer

Presentation is a summary only

This presentation is information in a summary form only and does not purport to be complete. It should be read in conjunction with Coventry Group Limited’s (the Company’s) Annual Report for the year ended 30 June 2015. Any information or opinions expressed in this presentation are subject to change without notice and the Company is not under any obligation to update or keep current the information contained within this presentation.

Not investment advice

This presentation is not intended and should not be considered to be the giving of investment advice by the Company or any of its shareholders, directors, officers, agents, employees or advisers. The information provided in this presentation has been prepared without taking into account the recipient’s investment objectives, financial circumstances or particular needs. Each party to whom this presentation is made available must make its own independent assessment of the Company after making such investigations and taking such advice as may be deemed necessary.

No offer of securities

Nothing in this presentation should be construed as either an offer to sell or a solicitation of an offer to buy or sell Company securities in any jurisdiction.

Forward looking statements

This presentation may include forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, these statements are not guarantees or predictions of future performance, and involve both known and unknown risks, uncertainties and other factors, many of which are beyond the Company’s control. As a result, actual results or developments may differ materially from those expressed in the statements contained in this presentation. Investors are cautioned that statements contained in the presentation are not guarantees or projections of future performance and actual results or developments may differ materially from those projected in forward-looking statements.

No liability

To the maximum extent permitted by law, neither the Company nor its related bodies corporate, directors, employees or agents, nor any other person, accepts any liability, including without limitation any liability arising from fault or negligence, for any direct, indirect or consequential loss arising from the use of this presentation or its contents or otherwise arising in connection with it.

For more information, please contact:

Peter Caughey

CEO and Managing Director, Coventry Group Ltd - (03) 9205 8223

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