SUPPLY NETWORK LIMITED — AGM Information 2024

Nov 26, 2024

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SUPPLY NETWORK LIMITED ABN 12 003 135 680 1 Turnbull Close Pemulwuy NSW 2145 PO Box 3405 Wetherill Park NSW 2164 Telephone: 02 8624 8077

ASX Release

27 November 2024

Chairman’s Address and Half Year Performance Guidance

Please find attached the Chairman’s Address to Shareholders and Half Year Performance Guidance being delivered to the Annual General Meeting today at 2.00pm.

Authorised by the Board of Supply Network Limited

Robert Coleman

Chief Financial Officer/Secretary Telephone: + 61 2 8624 8077

Chairman’s Address to 2024 Annual General Meefing

The 2024 result again came in ahead of our expectafions at this fime last year. I’d like to commend our 500 staff around Australia and New Zealand, who we credit for another excellent performance from your company.

A detailed review of 2024 is covered in our annual report, but I will summarise the highlights here.

Sales exceeded $300m with a steady profit after tax margin of 10.9%, producing a profit after tax of $33m.

Directors declared fully franked dividends totaling 56 cents for the year, which is an increase of 16.6% on 2023. An excepfional dividend reinvestment plan uptake of 83% for the final dividend has put the company in a solid financial posifion to fund further growth.

Network expansion confinued over 2024 at a slightly slower pace with Yatala in south-east Queensland, the only new branch to open. Trading since it opened has been well ahead of expectafions. The current year will see a new branch in outer north Perth, which is expected to open in March 2025, and we have commifted to a doubling of the size of our Illawarra branch. Further addifions are under considerafion in high-growth regions. The expansion of DC capacity at Truganina in Victoria experienced delays with development approvals but construcfion has commenced, and the new building is expected to be operafional around the end of this financial year. These projects combined with modificafions to exisfing facilifies are designed to enable the group to achieve revenues of $400+m.

As we have indicated a number of fimes, we expect our annual revenue growth to moderate this year towards historical levels of around 14%. Although the economy has showed signs of cooling, parficularly in some sectors, our first quarter revenue is around budget levels and management report good overall acfivity, including new enquiries. Margins have remained strong, and this is benefifing our profit after tax. At this stage we expect revenue for the first half to be around $170m and profit after tax to be in the range $19.5m to $20.0m, inclusive of approximately $400,000 profit after tax on disposal of our Christchurch property. Profit growth will moderate in the second half as we absorb costs for the new branch in north Perth and for expansions in Adelaide, which is now fully operafional, and Illawarra, which will be operafional around the end of the third quarter. We also expect to start incurring some addifional operafing costs for the Truganina expansion late in the fourth quarter.

We welcomed Mr Robert Fraser to the Board earlier in the year and he has already made a significant contribufion to the Governance and oversight of the company. He will be standing for elecfion as part of the formalifies today and we look forward to shareholder support on this. Subject to Robert’s re-elecfion, from the close of business at today’s meefing I will step down from the role of Chairman and Robert will become our new Independent Chair. I will return to a Non-Execufive Director role and look forward to supporfing the confinued growth of the business under Robert’s leadership.

In closing I’d like to thank my fellow directors for their support over my fime as Chairman and Geoff and his whole Mulfispares team for their fireless efforts in producing what has been a spectacular run of results from the business.