COVENTRY GROUP LIMITED — Earnings Release 2011

Aug 25, 2011

525 Great Eastern Highway Redcliffe WA 6104

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Tel : (08) 9276 0222 Fax : (08) 9436 5406

ASX Release

26 August 2011

FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2011

The directors of Coventry Group Ltd (Coventry) (ASX Code: CYG) today announced the audited results for the year ended 30 June 2011.

KEY POINTS FOR F11

• F11 was a year of major transition involving exit from the auto industry at a premium to N.T.A., with underperforming assets being sold that will release substantial cash

• Revenue from continuing operations up 1% to $229.4M

• Strong performance from the fluids and gaskets businesses offset by weak performances from the fastener and hardware businesses which face tough markets

• Trading EBIT from continuing businesses of $7.8M

• Write offs of intangibles of $24.2M led to a net loss after tax of $16.8M

• Final dividend of 11 cps giving 22 cps fully franked for the year – a 10% fully franked yield on the current share price

KEY POINTS FOR F12

• All 4 continuing divisions trading positively

• Auto WA and real estate sales will generate significant capital gains

• Balance sheet strongly cash positive

• Actively working on sound growth initiatives

• Selective buying back of Coventry shares on market at good value

• Carried forward tax losses will minimise tax payments

• Franking credits remaining after payment of the final 11 cps dividend will be $15.5M

• We expect to maintain and grow the current level of dividends

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RESULTS

RESULTS
Revenue from continuing operations ($M) (Loss)/profit from continuing operations ($M) Net (loss)/profit after tax ($M) NTA per share ($) Net cash ($M) Dividend (cents) EPS-basic (cents)	Year ended 30.06.11	Year ended 30.06.10	% Change
	229.4	226.2	+1.4
	(17.4)	4.3
	(16.8)	7.0
	3.38	3.39	-0.3
	7.1	5.7
	22.0	14.0	+57
	(43.4)	16.3

DIVIDEND

The directors have declared a final dividend of 11 cents per share, fully franked, payable on 23 September 2011 with a record date of 8 September 2011. This results in total dividends of 22 cents per share, fully franked in respect of the current year compared to 14 cents per share for the previous year. With the Company’s strong cash position, the dividend reinvestment plan will continue to be suspended for this dividend.

BUSINESS UNITS PERFORMANCE REVIEW

Industrial Products Distribution

Revenue for the industrial products business increased 1.5% to $218.3 million compared to the previous year. A loss before interest and tax of $16.8 million was recorded compared to a profit of $5.7 million for the previous year. However, the results for both years were adversely affected by materially significant items of a non-recurrent nature which totalled $21.8 million for the current year and $2.1 million for last year. Details of the significant items are set out in note 2 to the consolidated financial statements and, in the main, relate to impairment losses on goodwill, restructuring and redundancy costs and provisions for doubtful debts and obsolete stock.

The performance of the business unit continues to be impacted by the poor trading results of the fastener division. The continuing impact of the global economic crisis was felt across the fastener customer base but most acutely in construction – both domestic and commercial/industrial and government infrastructure areas. The division suffered from selling price deflation as the increased strength of the Australian dollar was passed to customers as competition heated for a smaller available market. The results were particularly adversely affected in the states of South Australia, Victoria, New South Wales and Queensland whilst Western Australia was stronger, buoyed by increased resources activity. The division’s activities in New Zealand also showed decline in both revenues and profitability due to the on-going economic recession. Data both from international and Australian based companies and economic indicators recognise that the results achieved were in line with the general experience of all companies in the market place. As a consequence of the poor trading results of this division all goodwill related to the fastener businesses which amounted to $21.1 million was deemed impaired. The business also addressed its cost base leading to restructure and redundancy costs amounting to $0.7 million.

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The Cooper Fluid Systems division had a strong increase both in revenue and profitability. The Queensland based business showed revenue and profit growth primarily due to resource based activity in Far North Queensland. The business in Western Australia and South Australia similarly showed strong growth in both revenue and profitability primarily from resource based activity.

The cabinet and furniture hardware division which trades as Artia declined in revenue and recorded a loss. In Australia the business rationalised to one distribution centre based in Melbourne. The costs associated with that move when combined with tough market conditions were the main reasons for the operating loss. The division’s small activities in New Zealand recorded a loss for the year as it struggled in an economy in recession. The establishment of the single, modern distribution centre will give the business a strong foundation on which to build future growth and profitability.

Automotive Parts Distribution

The automotive parts business recorded revenue of $166.8 million compared to $167.6 million for the previous year. A loss before interest and tax of $1.9 million was recorded compared to a profit of $3.5 million for the previous year.

The Company has exited the automotive parts business. The South Australian operations were sold to Burson Automotive Pty Ltd with the transaction completing in May 2011. The Western Australian operations were sold to Automotive Holdings Group Limited with an agreement signed in May 2011 and the transaction completing on 1 July 2011.

Gaskets Manufacturing

The Company’s controlled entity, AA Gaskets Pty Ltd recorded revenue of $12.7 million – a marginal decline of 0.5% on the previous year. The business performed strongly in Australia. In New Zealand the results were pleasing but were a decline on the previous year, reflecting the adverse economic conditions of that country.

OUTLOOK

The overall Group result will continue to be heavily influenced by the level of general economic activity in both Australia and New Zealand, which other than for the resources sector is expected to be subdued.

The funds released from the sale of the automotive business and progressively from the sale of freehold properties will provide the Group with the ability to respond swiftly to the growth opportunities both organic and external which are being investigated and progressed at present.

For further information, please contact:

Roger Flynn Executive Chairman Coventry Group Ltd (08) 9436 5403