COVENTRY GROUP LIMITED — Interim / Quarterly Report 2018

Feb 22, 2018

ABN 37 008 670 102

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Appendix 4D Half-year report for the six months ended 31 December 2017

Reporting period

Report for the half-year ended 31 December 2017

Previous corresponding period is the financial year ended 30 June 2017 and the half-year ended 31 December 2016

Results for announcement to the market 31 Dec 2017 31-Dec-16 Change $M $M $M Revenue from ordinary activities (including discontinued operations of AA Gaskets) 90,970 85,253 5,717 Profit/(loss) after tax attributable to members 8,742 (22,192) 30,934 Net profit/(loss) after tax attributable to members 8,742 (22,192) 30,934 Dividends Amount of dividend per security Amount per security Interim dividend current year Nil previous year Nil Final dividend current year Nil previous year Nil Total dividend current year Nil previous year Nil The Company's Dividend Reinvestment Plan remains suspended. No dividends have been declared in relation to the half-year ended 31 December 2017. No ordinary dividends were paid during the period.	Results for announcement to the market 31 Dec 2017 31-Dec-16 Change $M $M $M Revenue from ordinary activities (including discontinued operations of AA Gaskets) 90,970 85,253 5,717 Profit/(loss) after tax attributable to members 8,742 (22,192) 30,934 Net profit/(loss) after tax attributable to members 8,742 (22,192) 30,934 Dividends Amount of dividend per security Amount per security Interim dividend current year Nil previous year Nil Final dividend current year Nil previous year Nil Total dividend current year Nil previous year Nil The Company's Dividend Reinvestment Plan remains suspended. No dividends have been declared in relation to the half-year ended 31 December 2017. No ordinary dividends were paid during the period.	Change	Change % 6.7% - - Franked amount security at 30% Nil Nil Nil Nil Nil Nil	Change
Net Tangible Assets Per Security As at 31 December 2017 1.39 As at 31 December 2016 1.69

The financial information provided in Appendix 4D is based on the half-year condensed consolidated financial report (attached).

The attached financial statements and Directors’ declaration have been subject to an independent review.

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Coventry Group Ltd and controlled entities ABN 37 008 670 102

Financial report for the half-year ended 31 December 2017

This half-year financial report is to be read in conjunction with the financial report for the year ended 30 June 2017.

Coventry Group Ltd and controlled entities Financial report for the half-year ended 31 December 2017

Contents

Contents
	Page
Directors' report	1
Auditor's Independence Declaration	4
Condensed consolidated statement of profit or loss and comprehensive income	5
Condensed consolidated statement of financial position	7
Condensed consolidated statement of changes in equity	8
Condensed consolidated statement of cash flows	10
Notes to the financial statements	11
Directors' declaration	18
Independent Auditor's Review Report	19

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Coventry Group Ltd Directors' report For the six months ended 31 December 2017

The directors present their report on the Consolidated entity consisting of Coventry Group Ltd and controlled entities at the end of, or during, the six months ended 31 December 2017. Throughout the report, the Consolidated entity is referred to as the Group.

Directors

The directors of the Company at any time during the six month period ended 31 December 2017 and up to the date of this report are:

Neil George Cathie, Chairman

Robert James Bulluss, Managing Director and Chief Executive Officer Andrew William Nisbet (appointed 1 October 2017) Kenneth Royce Perry (resigned 22 November 2017) Nicholas John Willis (resigned 31 August 2017) Vicky Papachristos (resigned 28 July 2017)

Review of operations

The trading performance of the Group has improved in the first half of FY18. Group revenue for the half has grown year on year with Cooper Fluid Systems (CFS) and Trade Distribution New Zealand (TDNZ) delivering strong growth. Trade Distribution Australia (TDA) had some revenue growth which was encouraging.

Sales for the six months ending 31 December 2017 (excluding the non-continuing operations of AA Gaskets) were up 9.8% to $83.7m on the prior corresponding period. The underlying EBIT loss for the six months was -$1.7m, an improvement of $4.4m on the prior corresponding period. Net profit after tax including the profit on the sale of the AA Gaskets business, was $8.7m. Net loss after tax excluding the profit on the sale of the AA Gaskets business, -$4.3m compared to -$22.2m for the prior corresponding period.

During the half the business completed the sale of the AA Gaskets business to GUD Holdings following a strategic decision to focus on our two core industrial supply businesses.

The Executive Leadership Team was strengthened with the appointment of Rod Jackson as Chief Financial Officer and Tracey Gibbins as General Manager - People, Safety, Well Being and Quality.

Revenue

Percentage revenue change in the first half of FY18 (July to December) when compared with the prior corresponding period (PCP) is shown below:

period (PCP) is shown below:
Revenue change			1H FY18 Vs 1H FY17
Fluids			+21.0%
Trade distribution			+4.1%
Consolidated Group excluding non-continuing operations			+9.8%

Note 1: The discontinuing operations of AA Gaskets have not been included.

Cooper Fluid Systems

Cooper Fluid Systems made an increased contribution to the Group during the first half. Revenue has seen substantial growth with sales up 21.0% on PCP. Sales growth is being driven by an increase in service and maintenance activity in the resources sector and improving business conditions.

1

Coventry Group Ltd Directors' report For the six months ended 31 December 2017

Trade Distribution

Trade Distribution New Zealand continued to perform well in its key markets, with revenue up 10.2% on PCP and an increased contribution to the Group.

Trade Distribution Australia continued to show slow improvement with sales up 1.9% for the half year on PCP. The Board and management are not happy with the pace of change and the level of sales growth in this business unit and initiatives continue to be refined to accelerate the pace of improvement and return it to sustainable profitable growth. Key areas of focus are improving stock availability/service levels, returning to a trade distribution branch delivery model, ensuring branches have the right resource levels, building supplier partnerships, directional buying and selling, improving sales resource capability and further streamlining DC operations.

Significant work remains to return the TDA business to positive contribution and sustainable profitable growth. The business is focussed on delivering service excellence into to its core markets of mining and resources, industrial and construction. Our markets are generally performing well and there are early signs of recovery in the Western Australia market.

Corporate

Excluding an insurance recovery relating to the Cyber attack previously reported, corporate net costs reduced in the order of $1.0m on the prior corresponding period.

AA Gaskets divestment

The AA Gaskets sale completed on 1 December 2017. The transaction has been finalised and net proceeds from sale of the business assets received.

Share buy back

The minimum holding share buy-back for holders of unmarketable parcels of shares in the Company completed on 23 January 2018. A total of 336,075 shares were acquired and cancelled for a total amount paid of $373,315. The number of shareholders reduced by 1,290 to 1,784 at that time.

As previously advised when the AA Gaskets sales was announced, the Group will now commence an on market buy-back of up to 10% of the Issued Share Capital of the Company.

Balance sheet

Following the sale of the AA Gaskets business which completed on 1 December 2017, the Scottish Pacific securitised trade receivables facility was repaid but remains available for use in the future if required.

The Group had cash funds available of $6.3m as at 31 December 2017.

Group net tangible assets per share is $1.39 ($1.30 as at 30 June 2017).

With the improving performance of the Group and stronger balance sheet no further impairments or deferred tax asset adjustments have been required.

Dividends

As a consequence of the loss (excluding the profit on sale of the AA Gaskets business) recorded for the six months ending 31 December 2017, the Board has determined that no interim dividend be declared.

2

Coventry Group Ltd Directors' report For the six months ended 31 December 2017

Outlook

Our key markets in mining and resources, construction and industrial are continuing to perform well.

Overall, we are positive about the outlook for the Group.

Events since the end of the financial year

The directors are not aware of any matter or circumstance having arisen since the end of the half year and the date of this report that has significantly affected, or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years.

Significant changes in the state of affairs

Except for the sale of the AA Gaskets business, there have been no other significant changes in the state of affairs of the Group during the period.

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 on page 4.

Rounding of amounts

The company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the 'rounding off' of amounts in the directors' report. Amounts in the directors' report have been rounded off in accordance with the instrument to the nearest thousand dollars, or in certain cases, to the nearest dollar.

This report is made in accordance with a resolution of directors.

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Neil George Cathie Chairman

Robert James Bulluss

Managing Director and Chief Executive Officer

Melbourne 23 February 2018

3

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Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

To the Directors of Coventry Group Ltd

I declare that, to the best of my knowledge and belief, in relation to the review of Coventry Group Ltd for the half-year ended 31 December 2017 there have been:

• i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review; and

• ii. no contraventions of any applicable code of professional conduct in relation to the review

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KPMG

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Julie Carey Partner Melbourne 23 February 2018

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KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

Liability limited by a scheme approved under Professional Standards Legislation.

Coventry Group Ltd and controlled entities Condensed consolidated statement of profit or loss and comprehensive income For the six months ended 31 December 2017

comprehensive income For the six months ended 31 December 2017
Notes 0 Revenue from sale of goods Cost of sales Gross profit Other income 4 Employment costs Occupancy costs Freight Depreciation and amortisation expense 5, 6 Communication costs Vehicle operating costs Restructuring, impairment and other significant costs Other expenses Profit/(loss) before financial income and tax Financial income, including net foreign exchange gain Financial expense, including net foreign exchange loss Net financial (expense)/income Profit/(loss) before income tax Income tax (expense)/benefit Profit/(loss) for the half-year Profit from discontinued operation, net of tax 8 Profit/(loss) for the half-year	31 December 2017 $'000 Restated 31 December 2016 $'000 83,678 76,233 (52,437)* (47,582)
	31,241 28,651 2,753 2,023 (21,495) (21,030) (5,800) (5,016) (3,004) (3,314) (672) (1,782) (1,173) (934) (783) (836) (136) (8,253) (4,339) (5,867)
	(3,408) (16,358)
	4 186 (902) (91)
	(898) 95
	(4,306) (16,263) (904) (7,012)
	(5,210) (23,275) 14,278 1,457
	9,068 (21,818)

*Comparative information for the half-year ended 31 December 2016 has been restated for the effects of the application of AASB 5 Non-current Assets Held for Sale and Discontinued Operations following the disposal of the AA Gaskets business. The consolidated balance sheet and the Statement of changes in equity and Statement of cash flows for this period is not required to be restated. Refer to Note 8 'Discontinued operation' to the financial statements.

The above Condensed consolidated statement of profit or loss and comprehensive income should be read in conjunction with the accompanying notes.

5

Coventry Group Ltd and controlled entities Condensed consolidated statement of profit or loss and comprehensive income For the six months ended 31 December 2017

Notes Profit/(loss) attributable to: Owners of the Company Non-controlling interests Profit/(loss) for the half-year Other comprehensive income/(loss): Items that may be reclassified to profit or loss: Foreign currency translation differences Effective portion of changes in fair value of cash flow hedges Other comprehensive (loss)/income for the half-year, net of income tax Total comprehensive income/(loss) for the half-year Total comprehensive income/(loss) attributable to: Owners of the Company Non-controlling interests Total comprehensive income/(loss) for the half year Earnings/(loss) per share from continuing operations: Basic earnings/(loss) per share: Diluted earnings/(loss) per share:	31 December 2017 $'000 Restated 31 December 2016 $'000 8,742 (22,192) 326* 374
	9,068 (21,818)
	(536) (160) (25) 312
	(561) 152
	8,507 (21,666)
	8,207 (22,106) 300 440
	8,507 (21,666)
	(13.8) cents (61.5) cents (13.8) cents (61.5) cents

*Comparative information for the half-year ended 31 December 2016 has been restated for the effects of the application of AASB 5 Non-current Assets Held for Sale and Discontinued Operations following the disposal of the AA Gaskets business. The consolidated balance sheet and the Statement of changes in equity and Statement of cash flows for this period is not required to be restated. Refer to Note 8 'Discontinued operation' to the financial statements.

The above Condensed consolidated statement of profit or loss and comprehensive income should be read in conjunction with the accompanying notes.

6

Coventry Group Ltd and controlled entities Condensed consolidated statement of financial position As at 31 December 2017

Notes ASSETS Cash and cash equivalents Trade and other receivables Inventories Total current assets Deferred tax assets Property, plant and equipment 5 Intangible assets 6 Total non current assets Total assets LIABILITIES Trade and other payables Interest-bearing loans and borrowings Income tax payable Provisions Employee benefits Total current liabilities Other payables Employee benefits Total non current liabilities Net assets EQUITY Issued capital Reserves Retained earnings Total equity attributable to equity holders of the Company Non-controlling interests Total equity	31 December 2017 $'000 30 June 2017 $'000 6,309 5,149 31,708 29,260 44,769 49,282
	82,786 83,691
	5,827 6,749 4,202 4,698 5,897 5,935
	15,926 17,382
	98,712 101,073
	27,215 23,806 - 8,045 381 249 90 131 3,602 3,931
	31,288 36,162
	3,162 3,089 219 247
	3,381 3,336
	64,043 61,575
	108,063 108,063 (4,924) (815) (39,096) (47,838)
	64,043 59,410 - 2,165
	64,043 61,575

The above Condensed consolidated statement of financial position should be read in conjunction with the accompanying notes.

7

Coventry Group Ltd and controlled entities Condensed consolidated statement of changes in equity For the six months ended 31 December 2017

Balance at 1 July 2017 Total comprehensive (loss)/income for the half-year Profit/(loss) for the half-year Other comprehensive (loss)/income for the half-year Foreign currency translation differences Effective portion of changes in fair value of cash flow hedges Total other comprehensive (loss)/income Total comprehensive (loss)/income for the half-year Transactions with owners, recorded directly in equity Acquisition of non-controlling interest Dividends to equity holders Total transactions with owners Balance at 31 December 2017	Share-based payments reserve $'000 Hedge reserve $'000 Translation reserve $'000 Other reserve $'000 Total reserves $'000 Share capital $'000 Retained earnings $'000 Total for owners of the company $'000 Non-controlling interest $'000 Total equity $'000 - (44) (771) - (815) 108,063 (47,838) 59,410 2,165 61,575
	- - - - - - 8,742 8,742 326 9,068 - - (510) - (510) - - (510) (26) (536) - (25) - - (25) - - (25) - (25)
	- (25) (510) - (535) - - (535) (26) (561)
	- (25) (510) - (535) - 8,742 8,207 300 8,507
	- - - (3,574) (3,574) - - (3,574) (2,327) (5,901) - - - - - - - - (138) (138)
	- - - (3,574) (3,574) - - (3,574) (2,465) (6,039)
	- (69) (1,281) (3,574) (4,924) 108,063 (39,096) 64,043 - 64,043

Amounts are stated net of tax

The above Condensed consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

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Coventry Group Ltd and controlled entities Condensed consolidated statement of changes in equity For the six months ended 31 December 2017

Balance at 1 July 2016 Total comprehensive (loss)/income for the half-year (Loss)/profit for the half-year Other comprehensive (loss)/income: Foreign currency translation differences Effective portion of changes in fair value of cash flow hedges Total other comprehensive (loss)/income for the half-year Total comprehensive (loss)/income for the half-year Transactions with owners, recorded directly in equity Share based payment transactions Dividends to equity holders Total transactions with owners Balance at 31 December 2016	Share-based payment reserve $'000 Hedge reserve $'000 Translation reserve $'000 Total reserves $'000 Share capital $'000 Retained earnings $'000 Total for owners of the company $'000 Non-controlling interest $'000 Total equity $'000 104 (80) (190) (166) 108,110 (11,711) 96,233 2,031 98,264
	- - - - - (22,192) (22,192) 374 (21,818) - - (226) (226) - - (226) 66 (160) - 312 - 312 - - 312 - 312
	- 312 (226) 86 - - 86 66 152
	- 312 (226) 86 - (22,192) (22,106) 440 (21,666)
	21 - - 21 - - 21 - 21 - - - - - - - (165) (165)
	21 - - 21 - - 21 (165) (144)
	125 232 (416) (59) 108,110 (33,903) 74,148 2,306 76,454

Amounts are stated net of tax

The above Condensed consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

9

Coventry Group Ltd and controlled entities Condensed consolidated statement of cash flows For the six months ended 31 December 2017

Notes Cash flows from operating activities Cash receipts from customers Cash paid to suppliers and employees Cash from/(used in) operations Interest paid Income taxes refunded/(paid) Net cash used in operating activities Cash flows from investing activities Proceeds from sale of AA Gaskets Proceeds from sale of plant and equipment Interest received Acquisition of property, plant and equipment 5 Acquisition of intangibles assets 6 Net cash from/(used in) investing activities Cash flows from financing activities Proceeds of financing arrangements Repayment of financing arrangements Transactions with non-controlling interests Dividends paid to non-controlling interests Net cash (used in)/from financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at 31 December	31 December 2017 $'000 31 December 2016 $'000 89,352 89,162 (92,980) (95,182)
	(3,628) (6,020) (902) (91) 150 (486)
	(4,380) (6,597)
	20,907 - 83 106 4 (6) (777) (570) (57) (988)
	20,160 (1,458)
	68,897 13,543 (76,942) (3,524) (5,927) - (138) (165)
	(14,110) 9,854
	1,670 1,799 5,149 3,520 (510) (22)
	6,309 5,297

The above Condensed consolidated statement of cash flows should be read in conjunction with the accompanying notes.

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Coventry Group Ltd and controlled entities Notes to the condensed consolidated interim financial statements For the six months ended 31 December 2017

1 Significant accounting policies

(a) Reporting entity

Coventry Group Ltd (the 'Company') is a company domiciled in Australia. The condensed consolidated interim financial statements of the Company as at and for the six months ended 31 December 2017 comprise the Company and its controlled entities (together referred to as the 'Group'). The Group primarily is involved in the distribution of industrial products, the provision of fluid products and services and the manufacture and distribution of gaskets up to 1 December 2017 (Refer to Note 8).

The consolidated annual financial statements of the Group as at and for the year ended 30 June 2017 are available upon request from the Company's registered office at 235 Settlement Road, Thomastown VIC 3074, Australia or at www.cgl.com.au

(b) Statement of compliance

The condensed consolidated interim financial statements are general purpose financial statements prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act 2001, and with IAS 34 Interim Financial Reporting .

Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the last annual consolidated financial statements as at and for the year ended 30 June 2017. The consolidated interim financial statements do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated annual financial statements of the Group as at and for the year ended 30 June 2017.

These condensed consolidated interim financial statements were approved by the Board of Directors on 23 February 2018.

(c) Basis of preparation

The financial report is presented in Australian Dollars. The financial report is prepared on the historical cost basis except that derivative financial instruments are stated at their fair value.

The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191 dated 24 March 2016 and in accordance with that amounts in the financial report have been rounded off to the nearest thousand dollars, unless otherwise stated.

(d) Judgements and estimates

In preparing these consolidated financial statements, management has made judgements, estimates and assumptions that affect the application of the Group's accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates.

The significant judgements made by management in applying the Group's accounting policies, and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 30 June 2017.

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Coventry Group Ltd and controlled entities Notes to the condensed consolidated interim financial statements For the six months ended 31 December 2017

1 Significant accounting policies (continued)

(e) Going concern

In preparing the financial report, the Directors have made an assessment of the ability of the Group to continue as a going concern, which contemplates the continuity of business operations, realisation of assets and settlement of liabilities in the ordinary course of business and at the amounts stated in the financial report.

The Group made a profit after tax for the six months ended 31 December 2017 of $8.7m primarily as a result of the sale of AA Gaskets on 1 December 2017 along with continued strong results in Cooper Fluid Systems and improvements in the Trade Distribution business.

The Directors have assessed the forecast trading results and cash flows for the Group, including the impact of restructuring and other initiatives implemented by management to adjust to market conditions. These forecasts are based on best-estimate assumptions that are subject to influences and events outside of the control of the Group. The forecasts are supported by the performance of the Group in the six months to 31 December 2017.

Should trading conditions not improve or unexpectedly deteriorate, the Group could seek to:

• Make further adjustments to business operations;

• Raise additional funds from shareholders or other parties; and

• Utilise available funds ($13m) in the Scottish Pacific securitised trade receivables facility.

After making enquiries and considering the matters described above, the Directors have a reasonable expectation that the Group will have adequate resources to continue to meet its obligations as they fall due. For these reasons, the Directors continue to adopt the going concern basis in preparing the financial report.

The recoverable amounts are predicated on the assumption that the Group will continue as a going concern. If, in the event that the Group is unable to continue as a going concern, a further provision would be required to write down the value of assets to an alternative basis of valuation.

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Coventry Group Ltd and controlled entities Notes to the condensed consolidated interim financial statements For the six months ended 31 December 2017

2 Segment information

Trade Distribution: Includes the importation, distribution and marketing of industrial fasteners and associated products and hardware to the cabinet making, joinery and shop fitting industries;

Fluids: Includes the design, manufacture, distribution, installation and maintenance of lubrication and hydraulic fluid systems and hoses; and

Gaskets: Includes manufacturing and distribution of automotive and industrial gaskets.

The AA Gaskets business was sold on 1 December 2017 and is reported in the current period as a discontinued operation (See Note 8).

Information regarding the results of each reportable operating segment is included below. Performance is measured based on operating segment profit before income tax as included in the internal management reports that are reviewed by the CEO.

			Group and
			unallocated
			items and	Total
31 December 2017	Trade		consolidation	continuing	Gaskets
	Distribution	Fluids	adjustments	segments	(discontinued)	Total
	$'000	$'000	$'000	$'000	$'000	$'000
Information about reportable
segments
External sales	52,689	30,989	-	83,678	7,292	90,970
Other revenue	462	132	2,159	2,753	260	3,013
Total revenue	53,151	31,121	2,159	86,431	7,552	93,983
.
Reportable segment (loss)/profit
before finance costs, income tax
and significant items	(1,929)	2,294	9,457	9,822	1,564	11,386
.
Net financial income/(loss)	-	-	(898)	(898)	-	(898)
.
Other significant items:
Restructuring and other related
costs	-	-	(136)	(136)	-	(136)
Reportable segment
profit/(loss) before income tax	(1,929)	2,294	8,423	8,788	1,564	10,352
.
.
Reportable segment assets	56,407	24,017	17,369	97,793	919	98,712
Reportable segment liabilities	13,938	8,364	11,871	34,173	496	34,669
Capital employed	42,469	15,653	5,498	63,620	423	64,043

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Coventry Group Ltd and controlled entities Notes to the condensed consolidated interim financial statements For the six months ended 31 December 2017

31 December 2016 Information about reportable segments External sales Other revenue Total revenue . Reportable segment (loss)/profit before finance costs, income tax and significant items . Net finance income/(loss) . Other significant items: Impairment loss Restructuring and other related costs Reportable segment (loss)/profit before income tax . Reportable segment assets Reportable segment liabilities Capital employed	Trade Distribution Fluids Group and unallocated items and consolidation adjustments Total continuing segments Gaskets (discontinued) Total $'000 $'000 $'000 $'000 $'000 $'000 50,621 25,613 - 76,234 9,020 85,254 545 21 1,457 2,023 94 2,117
	51,166 25,634 1,457 78,257 9,114 87,371
	(3,434) 1,122 (5,793) (8,105) 2,134 (5,971) 290 - (195) 95 (31) 64 (5,576) - (2,292) (7,868) - (7,868) (28) (70) (287) (385) (94) (479)
	(8,748) 1,052 (8,567) (16,263) 2,009 (14,254)
	59,668 26,779 14,852 101,299 11,363 112,662 11,309 5,661 16,849 33,819 2,389 36,208
	48,359 21,118 (1,997) 67,480 8,974 76,454

3 Equity

On 23 January 2018 the Company completed it's unmarketable parcel minimum holding share buy-back, where 336,075 ordinary shares were acquired and cancelled at a price of $1.1108 per share. This share buy-back was announced on 7 December 2017.

On 8 December 2017 80,000 Performance Rights were converted to ordinary shares which increased the number of fully paid ordinary shares in the Company on issue to 37,716,479.

At the end of the period 37,716,479 shares remained in issue (2016: 37,836,479).

Dividends

No dividends have been declared in relation to the current period. For the previous corresponding period no dividends were declared.

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Coventry Group Ltd and controlled entities Notes to the condensed consolidated interim financial statements For the six months ended 31 December 2017

4 Other income

Rental and sub-lease rental income Other income	2017 $'000 2016 $'000 1,199 1,397 1,554 626
	2,753 2,023

5 Property, plant and equipment

Cost at 1 July 2017 Accumulated depreciation at 1 July 2017 Carrying amounts at 1 July 2017 Additions Depreciation for the period Disposals Carrying amount at 31 December 2017	Consolidated Plant and equipment $'000 40,500 (35,802)
	4,698 777 (577) (696)
	4,202

6 Intangible assets

Carrying amounts at 1 July 2017 Additions Amortisation for the year Carrying amounts at 31 December 2017	Goodwill $'000 Consolidated Computer software $,000 Total $'000 3,327 2,608 5,935 - 57 57 - (95) (95)
	3,327 2,570 5,897

Goodwill is attributable to Cooper Fluid Systems.

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Coventry Group Ltd and controlled entities Notes to the condensed consolidated interim financial statements For the six months ended 31 December 2017

7 Impairment of non-financial assets

Trade Distribution

For the half-year ended 31 December 2017, the Group's value in use model indicated no evidence of further impairment in the carrying amount of the assets of this business. Value in use was based on the following key assumptions:

• Sales growth at 4.8%

• Terminal growth 2.5%

• Post tax WACC of 11.5%

The model is sensitive to reasonable possible changes in the key assumptions keeping all other assumptions constant, particularly the headroom would be eliminated if the sales growth was below 3% for each year into perpetuity.

Cooper Fluids Systems

For the half-year ended 31 December 2017, the Group's value in use model showed the recoverable amount exceeded the carrying amount of the Cooper Fluids Systems CGU. The values assigned to the key assumptions were:

• Sales growth at 4.8%

• Terminal growth 2.5%

• Post tax WACC of 11.5%

Any adverse change in key assumptions may result in impairment.

8 Discontinued operation

(a) Description

On 20 November 2017 the Group announced the sale of the AA Gaskets business in Australia and New Zealand to GUD Holdings Limited. AA Gaskets has been a strong revenue growth business with improving profitability in recent years. Management committed to a plan to sell the AA Gaskets business in November 2017 following the Board's strategic decision to focus on our two core businesses which fit the industrial supply market vision it has for the Group.

The AA Gaskets business, sold on 1 December 2017, was not previously classified as held-for-sale and is reported in the current period as a discontinued operation. Financial information relating to the discontinued operation for the period to the date of disposal is set out below.

(b) Results of discontinued operation

The financial performance and cash flow information presented are for the five months ended 30 November 2017 (2017 column) and the six months ended 31 December 2016.

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Coventry Group Ltd and controlled entities Notes to the condensed consolidated interim financial statements For the six months ended 31 December 2017

8 Discontinued operation (continued)

(b) Results of discontinued operation (continued)

(b) Results of discontinued operation (continued)
Revenue Expenses Profit from operating activities Income tax expense Profit from operating activities, net of tax Gain on sale of AA Gaskets Profit from discontinued operations, net of tax	2017 $'000 2016 $'000 7,552 9,114 (5,988) (7,105)
	1,564 2,009 (380) (552)
	1,184 1,457 13,094 -
	14,278 1,457

(c) Details of the sale of the discontinued operation

(c) Details of the sale of the discontinued operation
Consideration received or receivable Property, plant and equipment Inventories Trade and other receivables Provisions Other costs Gain on sale	2017 $'000 21,012
	(407) (4,760) (3,833) 1,616 (534)
	13,094

(d) Cash flows from discontinued operation

(d) Cash flows from discontinued operation
Net cash used in operating activities Net cash from investing activities Net cash flow from financing activities Net increase in cash generated by the discontinued operation Earnings per share: Basic earnings per share: Diluted earnings per share:	2017 $'000 2016 $'000 1,434 2,104 20,930 1 (51) -
	22,313 2,105
	37.9 cents 3.9 cents 37.9 cents 3.9 cents

9 Events occurring after the reporting period

On 23 January 2018 the Company completed it's unmarketable parcel minimum holding share buy-back, where 336,075 ordinary shares were acquired and cancelled at a price of $1.1108 per share. This share buy-back was announced on 7 December 2017.

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Coventry Group Ltd and controlled entities Directors' declaration

I n the opinion of the Directors of Coventry Group Ltd ('the Company'):

1. the condensed consolidated interim financial statements and notes, set out on pages 5 to 17, are in accordance with the Corporations Act 2001, including:

a) giving a true and fair view of the Group's financial position as at 31 December 2017 and of it's performance for the six months ended on that date, and

b) complying with Australian Accounting Standards AASB 134 'Interim Financial Reporting ' and the Corporations Regulations 2001; and

1. there are reasonable grounds to believe that the Company will be able to pay it's debts as and when they become due and payable.

This declaration is made in accordance with a resolution of directors.

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Neil George Cathie Chairman

Robert James Bulluss Managing Director and Chief Executive Officer

Melbourne 23 February 2018

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Independent Auditor’s Review Report

To the shareholders of Coventry Group Ltd

Report on the Half-year Financial Report

Conclusion

We have reviewed the accompanying Halfyear Financial Report of Coventry Group Ltd.

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the Half-year Financial Report of Coventry Group Ltd is not in accordance with the Corporations Act 2001 , including:

• [giving a true and fair view][of the ] Group ’s financial position as at 31 December 2017 and of its performance for the Half-year ended on that date; and

• [complying with ] [Australian Accounting ] Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

The Half-year Financial Report comprises:

• [Condensed consolidated statement of financial ] position as at 31 December 2017;

• [Condensed consolidated statement of profit or loss ] and other comprehensive income, Condensed consolidated statement of changes in equity and Condensed consolidated statement of cash flows for the Half-year ended on that date;

• [Notes 1 to 9 comprising a summary of significant ] accounting policies and other explanatory information; and

• [The Directors’ Declaration. ]

The Group comprises Coventry Group Ltd (the Company) and the entities it controlled at the Half year’s end or from time to time during the Half-year.

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KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

Liability limited by a scheme approved under Professional Standards Legislation.

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Responsibilities of the Directors for the Half-year Financial Report

The Directors of the Company are responsible for:

• the preparation of the Half-year Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 ; and

• for such internal control as the Directors determine is necessary to enable the preparation of the Half-year Financial Report that is free from material misstatement, whether due to fraud or error.

Auditor’s responsibility for the review of the Half-year Financial Report

Our responsibility is to express a conclusion on the Half-year Financial Report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the Half-year Financial Report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Group’s financial position as at 31 December 2017 and its performance for the half-year ended on that date; and complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As auditor of Coventry Group Ltd, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a Half-year Financial Report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 .

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KPMG

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Julie Carey Partner Melbourne 23 February 2018

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