GALE PACIFIC LIMITED — AGM Information 2013

Oct 17, 2013

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GALE PACIFIC LIMITED
2013 ANNUAL GENERAL
MEETING
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18 OCTOBER 2013

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DAVID ALLMAN

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CHIEF EXECUTIVE OFFICER &
MANAGING DIRECTOR’S
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PETER MCDONALD

• Sales increased 9% to $120.0 million.

• Sales increased by:

  • 22% in the USA (US dollars)

  • 23% in the Middle East (US dollars).

• EBITDA in line with last year at $18.0 million.

• EBIT up 4% to $12.9 million. EBIT is 10.8% to sales.

• NPAT up 7% to $9.1 million.

• Diluted earnings per share of 3.0 cents.

• Return on invested capital 14.9%.

• Net Debt of $3.2 million. Net debt / equity ratio 3.8%.

• Final dividend 1.35 cents franked to 80%. Full year dividend increased 8%

• Cash from operations $11.5 million.

• Gale continues to generate very strong cash flows which have been used

	FY13 Review FY13 FY12 FY11 A$M’S A$M’S % Variance A$M’S Sales 120.0 110.5 9% 95.6 EBITDA 18.0 18.0 0% 15.8 EBIT 12.9 12.5 4% 9.9 NPAT 9.1 8.5 7% 7.1 Earningsper share ‐ cents 3.00 2.86 5% 2.42 Dividendsper share ‐ cents 2.65 2.45 8% 2.20 Cash from operations 11.5 9.5 21% 11.4 Net debt (3.2) (4.1) 22% (5.7)

Earnings per Share and Dividends per Share

Cents

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EBITDA / EBIT / NPAT (A$ Million)

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Operating Cash Flow (A$ Million)
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	FY07 FY08 FY09 FY10 FY11 FY12 FY13 Capital Expenditure (Gross) (4.0) (3.4) (1.0) (1.2) (0.6) (1.4) (1.5) Dividends Paid ‐ ‐ ‐ ‐ (8.4) (6.9) (7.6)

• Continuation of the strong annual cash flows from operations.

• Low capital expenditure requirements due to plant capacity

• Dividend payments comfortably below operating cash flow in

• $2.5 million cash paid for Highgrove acquisition in December,

• Net debt at 30 June of $3.2 million compared to $4.1

• Net debt to equity at 3.8%.

• Interest cover of 15.0 times (EBIT/interest).

Changes in Net Debt (A$ Million)

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Regional Business Unit Update

• Sales increased 8% over the prior year to A$76.9 million.

• EBITDA declined by 21% to A$6.2 million due to selling price reductions, product

• Sales increased 22% to US$25.9 million.

• Strong sales growth and ranging achieved with most major accounts.

• Good summer conditions aided the sale of outdoor shading and

• Sales of commercial fabrics slightly down on record sales result from

• Benefit from last years investment in additional retail sales and

• Expanded range commitments in hand for next season from two largest

• EBITDA increased 31% to US$2.1 million.

• Sales increased 23% to US$9.7 million.

• Increased sales in key markets of United Arab Emirates and Qatar.

• Construction activity has shown steady improvement in the region.

• Increased sales and demand for Synthesis Commercial 95 and

• EBITDA increased 19% to US$1.9 million.

• Strong, stable management and technical support teams.

• Record volumes, increased efficiencies, improved yields and reduced

• EBITDA increased 6% to US$7.6 million. EBITDA includes the margin on

• Ongoing plant modification has enabled us to increase capacity and

• Polymer prices have recorded a small increase over FY12.

• Safety statistics (LTI’s) improved by 50% year on year.

• Further improved our sourcing from third party Chinese suppliers to

• Focus continues on improving automation to reduce labour units to

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• Sales decreased by 27% to US$7.6 million.

• Reduction in sales to the Japanese market due to a carry over of

• Sales into South Africa declined as FY12 pipe line sales were not

• Gale Pacific products now being sold in 26 countries serviced by the

• Further market development resources have been added in Europe

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Regional Business Unit Results
Australasia Americas Middle East International China
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FY13 Sales 76.9M 25.9M 9.7M 7.6M 28.6M Up 8% Up 22% Up 23% Down 27% Up 24% Included in FY13 EBITDA 6.2M 2.1M 1.9M 7.6M* China Included in Down 21% Up 31% Up 19% Up 6% China

• Economic conditions to remain below trend and trading conditions are

• Retail conditions in Australasia and the USA have been weak but are

• New management is now in place for the Australasian business unit for

• Restructured Australian operations to create a single and more

• The first quarter has been challenging:

• Australian grain harvest not as strong as first anticipated, particularly in

• Increased operating costs continued into the first quarter in Australia as we

• Additional costs associated with the implementation of a new IT system in

• For the first time in many years we have experienced a significant number of

• Currency devaluation (A$:US$) will increase our cost of sales in the Australian

• We have faced some challenges in the first quarter that have us behind

• While it is too early to provide accurate guidance, with a stronger sales

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improvements, management is forecasting growing sales and earnings
per share for the full year.
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Disclaimer

Statements contained in this presentation, particularly those regarding possible or assumed future performance, estimated company earnings, potential growth of the company, industry growth or other trend projections are or may be forward looking statements. Such statements relate to future events and expectations and therefore involve unknown risks and uncertainties. Actual results may differ materially from those expressed or implied by these forward looking statements.

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BUSINESS OF THE MEETING

Financial and Related Reports

To lay before the Annual General Meeting the Financial Report of the Company and its controlled entities and the related Directors’ and Auditor’s reports for the year ended 30 June 2013 for shareholders to receive and consider.

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Adoption of Remuneration Report (Non Binding Vote)

That the Remuneration Report of the Company and its controlled entities for the year ended 30 June 2013 be adopted. The vote on this item is advisory only and does not bind the Directors or the Company.

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Proxies for resolution for the Adoption of the Remuneration Report

For:

97,049,878

Against:

790,994

Open‐Useable:

9,153,446

Open‐Conditional:

0

Open‐Unusable:

0

Abstain:

64,904

Excluded:

7,689,989

Total:

114,749,211

Re‐Election of Director

Mr George Richards retires as a director of the Company by rotation in accordance with rule 7.1(f) of the constitution of the Company and, being eligible, offers himself for re‐election.

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Proxies for resolution for the Re‐election of Director

For:

104,896,122

Against: Open‐Useable:

129,244

9,153,446

Open‐Conditional:

0

0 Open‐Unusable:

Abstain:

570,399

Excluded:

0

Total:

114,749,211

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QUESTIONS