COVENTRY GROUP LIMITED — Annual Report 2007

Aug 23, 2007

COVENTRY GROUP LTD

ACN 008 670 102

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Results for Full Year Ended 30 June 2007

Roger Flynn Executive Chairman

Tony Hockley Chief Financial Officer

SUMMARY

F’07

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• Some great (& some ordinary) operating results

• Negated by facing balance sheet reality

• Major Q4 re-assessments & changes

• Review of business units completed

• F’08

• From project gestation to implementation

• Transformation & consolidation

• Target business basics

• Organic growth

OVERVIEW OF 2007

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• Results unsatisfactory

• A year of turmoil / re-assessment

• Change process implemented

• Paving the way for transition

• Getting control back into the business / processes

• Driving accountability

SUMMARY OF KEY CHANGES / ISSUE RESOLUTION

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• Key personnel changes

• CEO, CFO, CIO, GM Auto

• State Managers Auto, WA, Qld SA Industrial SA, Vic, NZ

• Compass IT implementation (see separate slide)

• Building issues resolved re Redcliffe site – new state of the art Auto Warehouse & Group HQ

• Relocation October / November 2007

• Realistic view of asset carrying values - Goodwill written off for auto Qld / NT ($8.8m)

• IT write-off ($8.8m)

• Significant inventory and receivables provisions

PROJECT COMPASS IMPLEMENTATION Previously implemented – Finance – Fasteners WA, SA, NSW – Automotive SA – Howard Silvers Recently

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• Fasteners Vic

PROJECT COMPASS IMPLEMENTATION (Cont’d.)

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To complete in F’08

– Auto WA, Qld, NT - Coopers Fluids - Fasteners Qld & Infix - NZ operations

• Original Budget

• Expenditure on project to 30.6.07

• Additional expenditure to complete

• Likely enhancements thereafter

$13.7m

$18.0m $5.0m $3.2m

• Implementations becoming smoother

RESULTS SUMMARY

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• Total sales up 4% to $523m

• Sales from continuing operations up 4% to $506m

• Normalised PBIT up by 7% to $24.3m

• Normalised profit after tax steady at $13.4m

• No final dividend

• Significant impairment and restructuring costs of 17.6m

FINANCIAL OVERVIEW CONTINUING OPERATIONS

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	$M	FY07	FY06	%
				Change
	Sales	506.4	485.4	↑4
	EBIT - normalised	24.3	22.8	↑7
	Net profit after tax	(1.2)	9.6	-
	(after minority interest but including
	profit from discontinued operations)
	EPS - normalised (cents) EPS (cents)	35.0 (3.8)	36.7 26.1	↓5 -

FINANCIAL OVERVIEW (Cont’d) – CONTINUING OPERATIONS

FY07 FY06 EBIT / Sales (%) 4.8 4.7 Return on capital employed (%) 10.0 9.4 (EBIT / equity + net debt) Return on equity (%) 8.0 8.1

CASH FLOW & GEARING

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$M	FY07	FY06
Operating cash flow Closing net interest bearing debt Closing equity Net debt / equity (%) Net debt / equity + net debt (%) Interest cover (times)	10.0 75.5 168.1 44.9 31.0 4.9	2.1 76.4 166.4 45.9 31.5 7.1

DIVIDENDS

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$M FY07 FY06 EPS – normalised (cents) 35.0 36.7 Dividend per share (cents) 17.0 35.0 Franking (%) 100 100 Franking account balance 20.5 23.1 (after payment of final dividend for FY06)

CAPITAL EMPLOYED

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$M FY07 FY06 Capital expenditure 18.6 20.0 Stock turns 2.9 3.0 Days sales in trade debtors 55.8 57.3

Capital expenditure remains high due to computer system replacement and relocating principal site in WA

SIGNIFICANT ITEMS IMPACTING 07 RESULTS (PRE TAX)

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$M

• Capital gain on sale of Bitumen business

• Impairment losses on goodwill of acquired Auto businesses (Qld/NT)

• Losses from exiting NSW Auto business

• Write down of Company-wide IT system including expenditure for non - recurring IBM contract

3.0

(8.8) (0.7) (10.4)

AUTOMOTIVE

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$M	FY07	FY06	% Change
Revenue EBIT - normalised EBIT margin (%) Capital employed Return on capital employed (%)	242.0 1.3 0.1 69.2 1.9	261.6 1.5 0.6 84.1 1.8	↓ 7 ↓10

Cooper Fluids excluded from automotive as transferred to Industrial (F06 restated)

Revenue decline due to exit from NSW in September 06 (Sales - $11.7m) Sales decline in SA $7.6m due to Compass implementation with substantial loss of EBIT

INDUSTRIAL

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$M	FY07	FY06	% Change
Revenue EBIT - normalised EBIT margin (%) Capital employed Return on capital employed (%)	258.6 22.9 8.9 107.8 21.2	218.1 20.1 9.2 100.0 20.1	↑19 ↑14

Coopers Fluid included for both years Strong growth in F07 (19%)

GASKETS

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$M FY07 FY06 % Chan e g Revenue 11.1 11.4 ↓ 2 EBIT 1.2 1.5 ↓20 EBIT margin (%) 10.7 13.2 Capital employed 9.0 9.4 13.3 Return on capital employed (%) 15.9

BITUMEN –

SOLD 29 JUNE 2007

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$M	FY07	FY06	% Change
Revenue EBIT EBIT margin (%) Capital employed Return on capital employed (%)	17.3 1.4 7.8 5.8 23.4	17.0 1.2 7.1 5.7 21.1	↑2 ↑15

* By reference to average capital employed for year ended 31 May 07 Successful year with increased profitability due to increased productivity

“STOCK TAKE” OF GROUP

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• Solid businesses - over $0.5bn in revenue

• Well positioned in strongest economies - WA/Qld

• Businesses have a high degree of resistance to economic downturns

• Well established / recognised brands with strong geographic distribution

• Most continuing businesses in good shape, sales growth 4%, EBIT growth 7%

• “Pain” taken in F07 on asset carrying values

• New Executive Team committed to delivering results

PATH FORWARD

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• As a matter of urgency get every business in a position to contribute to the Group

• In the short term progress process improvements – better buying, improved customer service, reduced cost structures

• Change to “ownership” mindset

• In F08 concentrate more on organic growth

• For F09 and beyond, organic and acquisition growth