ANNUAL MEETING
23 December 2020
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CAVALIER BOARD
Chairman, George Adams | Director, Dianne Williams | Director, Grant Biel |
Director, John Rae | Director, Paul Izzard | Director, Alan Clarke |
CHAIR'S
PRESENTATION George Adams
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STRATEGY DEVELOPMENT: KEY EVENTS
- FY19: Strategic review to identify opportunities to leverage Cavalier's strengths and unlock new value for shareholders
- FY20: Began journey towards becoming a more sustainable business with shift to being a design-led wool focused company, in response to evolving consumer trends
- 2H20: Completion of strategic review
- 1H21: Unveiling of new strategy to become a sustainable, interior solutions business. Launched new Bremworth brand.
- 1H21: Reviewed capital options to fund transformation strategy. Announced sale and leaseback of Auckland property
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OUR GROWTH STRATEGY
GROW THE WOOL FLOORING MARKET
GROW OUR SHARE OF THE MARKET
EXPAND OUR PRESENCE
INNOVATION AND FUTURE THINKING
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FUNDING CAVALIER'S
TRANSFORMATION
-
Auckland Property Sale: Sale and leaseback of Cavalier's Auckland
Property for $25.5 million (net proceeds of $25.3 million). - Additional capital options to be considered, if further funding is required.
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OUR FINANCIAL
JOURNEY
FY21 to FY23: Investment into resetting the business, commencing the new strategy and navigating the economic recovery post-COVID.
FY23: Return to profitable growth.
FY25: Full benefits of transformation strategy being realised, with increasing value and profitability.
FY21 OUTLOOK
- Short term outlook for the economy remains uncertain.
- Economists predicting a global uplift in second half of 2021, as vaccines are rolled out.
- 1H21 benefit from faster than anticipated sell down of synthetics.
- 2H21 sales revenue expected to reduce as exit from synthetics is completed. Investment into marketing and people, reset of manufacturing and sales base.
Cavalier Annual Meeting 2020
A STRONG FOUNDATION FOR THE FUTURE
- Carefully considered strategy that takes advantage of Cavalier's strengths and consumer trend
- Zero debt
- Funding from the sale and leaseback of the property (if approved by shareholders)
- A team with significant expertise, industry knowledge and skills.
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CEO'S
PRESENTATION Paul Alston
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WE ARE BREMWORTH
- Building on our heritage as a leading designer and manufacturer of premium wool carpets and rugs
- Evolving to deliver desirable, safe, sustainable and high performing natural interior solutions
- Purpose led business, incorporating eco- conscious practices in all we do
- Design led thinking, to deliver long lasting and desirable solutions
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FY20 YEAR IN REVIEW
To 30 June 2020
- KEY OUTCOME: Announced transformation strategy to become a sustainable, interior solutions business.
- Challenging operating environment - softening trading condition in 1H20, further exacerbated by COVID-19
- Organisational restructure in Australia. Post period end, commenced re-set of the New Zealand operations.
- Launched new products and Lifestyle range to offer consumers with further choice
- Expanded retail distribution network, particularly in Australia
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COVID-19 RESPONSE
- Material impact from lockdown in NZ and restrictions in Australia
- April revenue dropped to almost zero, with some online sales
- Strong recovery since emerging from lockdown, however, with some impact from further COVID restrictions in Victoria, Australia
- Shipping and port delays currently impacting supply chain.
RECOVERY BEING DRIVEN BY:
- Pent up demand after lockdown
- People spending on renovations and new homes in lieu of other discretionary spend
- Retailers stocking up on synthetic carpets ahead of Cavalier's transition away from these fibres
- Increasing sales of wool and higher value products.
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FY20 FINANCIAL SNAPSHOT
- Revenue down 13% on pcp as a result of COVID-19
- Normalised EBIT of $2.3m
- Non-trading,non-cash adjustments of $(11.2)m, primarily related to strategic change and reset
- Strong operating cashflows of $6.8m, mainly due to exit from synthetics
- Net loss after tax of $(21.5)m
- Normalised NLAT of $(3.5)m
- Debt reduced to $14.5m as at 30 June 2020; all debt repaid as at end-November 2020
A reconciliation of GAAP-compliant to non-GAAP measures is available on page 188 of Cavalier Corporations FY20 Annual Report
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WE'RE ON A
MISSION ….
- To deliver a range of home experiences built with people, the planet and growth in mind.
- We believe the changes we make today will prepare us for tomorrow.
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OUR VISION | WHAT DEFINES US |
Our vision is to become a | We believe that by embracing nature |
global leader in designing | we can make a genuine difference to |
and creating desirable, | the wellbeing of people and the |
safe, sustainable and high | planet and deliver the design and |
performing natural | performance attributes customers |
interior solutions. | care about. |
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OUR FOCUS IS
ON ….
- Reducing our impact on the environment
- Transitioning out of synthetics
- Building on our heritage
- Executing our strategic growth initiatives
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OUR PROGRESS TO DATE
GROW THE WOOL FLOORING MARKET
Increasing awareness of the NZ strong wool story
GROW OUR SHARE OF THE MARKET
Rollout of the Lifestyle collection and other uniquely designed products, to provide more choice for consumers and a range of value offers
EXPAND OUR PRESENCE
Additional stores in Australia, increased network in New Zealand. Investigating opportunities in China and USA
INNOVATION AND FUTURE THINKING
Investigating opportunities for adjacent interior solutions products
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THE RIGHT PLATFORM FOR THE FUTURE
- New organisational structure in response to exit from synthetics
- Downsizing of Auckland manufacturing
- Increasing capacity at Napier and Whanganui
- Investment into R&D, focused on sustainability
- Funding of our transformation - property sale, with other capital funding options to be considered
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OUR SUSTAINABLE FUTURE
- We are on a journey towards becoming a more sustainable company
- We are exiting synthetics, a reduction of 2.5m kg of synthetic fibre consumption per annum
- Our wool carpets are made with 87% natural materials - we will invest in scientific research to identify solutions to make our products 100% sustainable
- We are actively removing single use plastics from the business
- We will seek new ways to reduce, recycle, and remove plastic from our products, our business and our daily lives
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1H21 TRADING UPDATE
- Continued strong performance in NZ.
- Softer performance in Australia, further impacted by shipping and port delays. Better mix of higher margin carpets being sold.
- Some impact from Auckland and Victoria COVID restrictions
- Faster than anticipated sell down of synthetics
- Net debt fully repaid as at end November 2020.
1H21 GUIDANCE
For the six months ending 31 December 2020
Normalised EBITDA is expected to be between $4.0m and $5.0m.
Normalised EBITDA is post IFRS 16 and excludes the one-off gains from the sale of the Auckland property and redundancies
This compares to a normalised EBITDA of $3.0m for the prior comparative period.
Cavalier Annual Meeting 2020
2H21 PRIORITIES AND OUTLOOK
PRIORITIES
- Launch new marketing campaign
- Leverage consumer insights to tailor marketing for different consumer groups
- Continue to rollout Lifestyle ranges
- Continue to expand retailer network, particularly in Australia
- Maintain focus on innovation.
2H21 OUTLOOK
- Outlook for the economy remains uncertain, however, some indications of positive economic activity
- Expect NZ woollen carpet sales volume to be well up on pcp; Australia expected to improve when supply chain disruptions reduce.
- Total sales will be lower than pcp due to exit from synthetics, and while new initiatives are implemented
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BUSINESS OF THE MEETING
Shareholder
Discussion
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RESOLUTIONS
Resolution 1 - Re-election of Dianne Williams: That Dianne Williams, who retires and who is eligible for re-election,be re-electedas a director of the Company.
Resolution 2 - Election of Paul Izzard: That Paul Izzard, who was appointed as a director by the Board on 20 November 2020 and who is eligible for election, be elected as a director of the Company.
Resolution 3 - Auditor's remuneration: That the directors be authorised to fix the fees and expenses of the auditor.
Resolution 4 - Approval of sale and leaseback of Auckland property: That the sale and leaseback of the Auckland Property, details of which are set out in Explanatory Note 4, so as to enable the Company to execute its transformation to the all-wooland natural materials business model, while also providing it with additional liquidity and funding, be approved.
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PROXIES AND POSTAL VOTES
FOR | AGAINST | PROXY DISCRETION | |
Re-election of Dianne | 22,861,824 | 790,706 | 1,377,649 |
Williams | 91.34% | 3.16% | 5.50% |
Election of Paul Izzard | 23,638,960 | 81,706 | 1,377,649 |
94.19% | 0.33% | 5.49% | |
Auditors' remuneration | 23,592,092 | 26,552 | 1,368,416 |
94.42% | 0.11% | 5.48% | |
Sale and leaseback of | 22,845,672 | 829,298 | 1,368,510 |
Auckland Property | 91.22% | 3.31% | 5.46% |
The Company has received 149 proxy and postal votes representing approx. 36.5% of total shares, with more than 90% of those in favour of each of the four resolutions.
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CLOSE OF THE MEETING
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DISCLAIMER
- This presentation has been prepared by Cavalier Corporation Limited ("CAV"). The information in this presentation is of a general nature only. It is not a complete description of CAV.
- This presentation is not a recommendation or offer of financial products for subscription, purchase or sale, or an invitation or solicitation for such offers.
- This presentation is not intended as investment, financial or other advice and must not be relied on by any prospective investor. It does not take into account any particular prospective investor's objectives, financial situation, circumstances or needs, and does not purport to contain all the information that a prospective investor may require. Any person who is considering an investment in CAV securities should obtain independent professional advice prior to making an investment decision, and should make any investment decision having regard to that person's own objectives, financial situation, circumstances and needs.
- Past performance information contained in this presentation should not be relied upon (and is not) an indication of future performance. This presentation may also contain forward looking statements with respect to the financial condition, results of operations and business, and business strategy of CAV. Information about the future, by its nature, involves inherent risks and uncertainties. Accordingly, nothing in this presentation is a promise or representation as to the future or a promise or representation that a transaction or outcome referred to in this presentation will proceed or occur on the basis described in this presentation. Statements or assumptions in this presentation as to future matters may prove to be incorrect.
- A number of financial measures are used in this presentation and should not be considered in isolation from, or as a substitute for, the information provided in CAV's financial statements available at www.cavcorp.co.nz.
- CAV and its related companies and their respective directors, employees and representatives make no representation or warranty of any nature (including as to accuracy or completeness) in respect of this presentation and will have no liability (including for negligence) for any errors in or omissions from, or for any loss (whether foreseeable or not) arising in connection with the use of or reliance on, information in this presentation.
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Cavalier Corporation Ltd. published this content on 23 December 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 December 2020 10:40:01 UTC