Directors’ report
The directors of Wattyl Limited present their report on the consolidated entity
consisting of Wattyl Limited (the company) and the entities it
controlled at the end of, or during, the year ended 30 June 2007.
Directors
The following persons were directors of the company during the whole of the financial year and up to the date of this report:
J.W. Ingram
J.D. Nolan
U.B. Meyerhans
M.R. Brown
P.E. Akopiantz
M.B. Luby was appointed as a non-executive director on 7 March 2007
D.J. Grady resigned as a director on 27 October 2006.
Information on directors is set out on page 17 of this Annual Report.
Directors’ shareholdings
Shares Options Performance Rights
J.W. Ingram 71,246 n/a n/a
J.D. Nolan 32,000 n/a n/a
U.B. Meyerhans 202,000 200,000 118,970
M.R. Brown 5,000 n/a n/a
P.E. Akopiantz 2,000 n/a n/a
M.B. Luby 2,000 n/a n/a
Principal activities
During the year the principal activities of the consolidated entity were the
manufacture and marketing of paints and other surface coatings.
There was no significant change in the nature of these activities during the
year.
Dividends – Wattyl Limited
2007
$’000
2006
$’000
Dividends paid to members during the financial year were as follows:
Final ordinary dividend for the year ended 30 June 2006
of 6 cents (2006 – 2 cents) per fully paid share paid on 22 September
2006
Final special dividend for the year ended 30 June 2006 of 40 cents (2006 – 5
cents)
per fully paid share paid on 15 September 2006
Interim ordinary dividend for the year ended 30 June 2007 of 8 cents (2006 – 8
cents)
per fully paid share paid on 30 March 2007
4,834
32,801
5,929
1,600
4,001
6,432
43,564 12,033
In addition to the above dividends, since the end of the financial year the
directors have recommended the payment of a final ordinary
dividend of $5,935,000 (7 cents per fully paid share) to be paid on 21 September
2007.
Review of operations
The consolidated net profit for the year after income tax was $16,588,000,
including a charge for non-recurring items of $174,000, this
compares with a reported net profit after income tax of $4,084,000 in the prior
corresponding period, which included a charge for nonrecurring
items of $8,980,000.
Australia
Improved price management and a focus on higher value product mix more than offset a slight decline in volume, which in turn resulted
from a decline in the housing market.
The continued focus on costs and delivery performance to customers had a major
impact on earnings, improving EBIT (excluding nonrecurring
items) by some 80%.
New Zealand
The New Zealand market continued to be impacted by a lower level of housing starts. While sales volume was slightly ahead of the
previous year, the challenging market conditions made it difficult to recover
increased costs with higher sales prices.
The performance was further impacted by investment in the company owned distribution
network and a strengthening of our presence in
the south island, with an upgraded dedicated warehouse to better serve that
market. A decision to convert to low VOC tinters across our
network, while more environmentally friendly, added additional costs to cost
of doing business.
The consolidated net profit included the following non-recurring items:
2007
$’000
2006
$’000
Exit/restructure costs in US operations
Restructure of Australian operations
Inventory write down
Strategic business review
Takeover advice and compliance costs
923
(1,450)
–
–
(127)
–
(2,965)
(3,670)
(772)
(5,153)
Non-recurring items before tax
Tax benefit relating to one-off items
(654)
480
(12,560)
3,580
Non-recurring items after tax (174) (8,980)
A detailed review of the operations of the consolidated entity during the
financial year and the results of those operations is set out in the
Chairman’s and Managing Director’s Report on pages 4 to 7 of the
Annual Report.
Significant changes in the state of affairs
The directors are not aware of any other significant change in the state of
affairs of the consolidated entity that occurred during the financial
year, other than as disclosed in the accompanying financial statements and
reports.
Subsequent events
The directors are not aware of any matter or circumstance that has arisen
since the end of the financial year that has significantly or may
significantly affect the operations of the consolidated entity, the results
of those operations or the state of affairs of the consolidated entity
in subsequent financial years, other than as disclosed in the accompanying
financial statements and reports.
Likely developments
Likely developments in the operations of the consolidated entity and the expected
results of those operations are contained in the
Chairman’s and Managing Director’s Report. In the opinion of the
directors, it would be unreasonably prejudicial to the consolidated
entity’s interests if any further information on likely developments
and expected results of operations were included in the report.
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