Coated with success
Chairman’s Report
The 2006/07 financial year saw the
completion of the major restructure
program which re-established a
sound foundation for the Group.
The business is now much better
positioned to focus on its market
strategy and growth opportunities.
Result
The profit after tax from continuing
operations (before ‘non recurring’
items) for the year was $16.4 million
an improvement of 24% over the
previous year against a continued
backdrop of subdued housing
conditions both in Australia and
New Zealand. This is a very pleasing
result and shows the benefit of
the restructure program which
commenced in October 2005.
Reported net profit for the year
was $16.6 million compared with
$4.1 million in FY2006.
I am very pleased to confirm that
the restructure program, which was
announced in October 2005 and
targeted total savings of $22 million
by 30 June 2007, has successfully
been completed with total actual
savings of $24 million.
During this financial year, in addition
to the successful completion of the
restructure program, the management
team have continued to focus on the
strategic direction of our key brands
and channels to market.
Dividend
Your directors declared a fully franked
final ordinary dividend of 7 cents per
share, bringing fully franked ordinary
declared dividends for the year to
15 cents per share, approximately
80% of net profit after tax before
non recurring items.
Cashflow
Prudent balance sheet management
led to a net debt position of
$48 million, representing a gearing
ratio (net debt : net debt plus equity)
of 26.9%.
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Special
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Special
Profit after Tax (A$m)
continuing operations
before non-recurring items
Corporate Governance
The corporate governance practices
of the Group are detailed within this
report and Wattyl has an ongoing
commitment for continuous
improvement, transparency in
reporting and good corporate
governance.
In the important area of risk
management, the Group continues to
focus on improving the identification
and management of risks to the
organisation. During the year, an
Executive Risk Committee was
established to drive this process
and the committee regularly reports
directly to the Board of Directors
on risk management matters. An
outsourced internal audit function
was also established during the year
to assist management and the Board
in ensuring compliance with internal
controls and risk management
programs. I am confident that
management have put in place
Earnings per Share (cents)
continuing operations
before non-recurring items
an effective risk management system
for the Group, which ensures that risk
management is embedded in all
aspects of the Group’s operations.
New Director
In March 2007 we were able to
fill a vacancy on the Board with
the appointment of Mr Mark Luby
as a non-executive director of the
company. Mr Luby brings significant
business skills and operational
experience to the Board of Directors
and will offer himself for election
at the annual general meeting on
26th October 2007.
Future
Looking ahead, whilst the housing
market in particular in Australia only
shows moderate improvement in
the short term, the company with
its re-established cost base, clear
goals and strategic direction is in
an excellent position to continue
to deliver value to our shareholders.
Dividends (cents)
Employees
In closing I would like to thank my
colleagues on the Board for their
contribution over the last financial year
and on behalf of the Board I would
like to thank the Wattyl team for their
continued efforts during the 2006/07
year. We have many talented and
loyal staff in the organisation, who are
committed to the Group’s future
success.
Whilst many challenges and
opportunities lie ahead for the Group,
the refocused organisation will enable
the Group to meet these challenges
and opportunities into the future.
John Ingram,
Chairman
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