KCQ's for the Annual Report

Key Concepts:

·    There was a decrease in revenue from continuing activities for the year.

·    There was increase in earnings before tax, interest, depreciation and amortisation.

·     No dividends were paid or proposed during the year.

·     The net assets increased by $6,878,315 from 30 June 2012 to 30 June 2013 – and this is largely due to the refinancing of company’s debt during the year, partially offset by the net loss from operations for the year.

·      Oldfields Holdings had purchased $8 million of debt from Westpac (its primary lender) for a payment of $2.5 million.

·      Gross margins improved mainly due to an increase in the company’s efficiency and better utilisation of labour in the scaffolding division (48.3% - 48.7%)

·      Revenue for paint applications was in line with the previous financial year.

·      The garden shed division experienced a decline in the last year

·      Total revenue in the scaffold division declined 9.6% compared to prior year, due to a reduction in scaffolding equipment sales (a large one-off sale from early 2012 was not repeated the following year).

·      Positive customer feedback on all products and services supplied by the company is important.

·      Expected progress during the year is going to provide a good foundation for profitable growth in the future.

·      To ensure that new products that are launched throughout the year remain successful, Oldfields Holdings devises a full marketing support program to put in place.

·      The company has also put a supplier rationalisation program in place, therefore reducing suppliers, which has ultimately allowed for negotiation of better costs, reduced logistics costs, as well as improved inventory management.

·      Management and focus changes have been made to the garden shed division in order to create an increase in revenue and profitability, concentrating particularly on gaining additional distribution in the retail sector.

·      Revenue declines have been experienced in the professional painting market and was impacted in the decline in new building approvals during the year.

·      A private label contract was lost during the year which influenced top line revenue growth however did not impact on the company’s profit.

·      The garden shed division has experienced a decline in the last year due to a reduction in --domestic sales caused by an ongoing decline in consumer spending and minimal distribution in major hardware outlets.

·      The division was also impacted by a customer in South Australia being placed into Administration which resulted in a bad debt of $83,647

·      With a particular focus on Western Australia and Victoria, there has been less construction activity, therefore it has become a competitive sector for the company.

·      Oldfields Holdings had purchased $8 million of debt from Westpac Bank (its primary lender) for a payment of $2.5 million.

·      Recent packaging and products launched have received positive customer feedback, and this is expected to continue as more products are to be updated in the coming year.

Key Questions:

·  1. What is amortisation?

·  2.What is the reasoning for Westpac reducing the amount of debt that Oldfields Holdings owed them – what is the benefit to Westpac in doing this?

·  3. Which sector of the company has this debt arisen from? - It does not stipulate/pin point a particular area of the company.

·  4. How did the company manage to refinance the debt?

·  5. Why does the company proceed to have one off sales one year and not the next, therefore experiencing a decline in total revenue for one sector?

·  6. Is there more behind the figures and information that they have provided?