2010/11 Full Year Results - Crowe Horwath International

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2010/11 Full Year Results - Crowe Horwath International

23 August 2011Level 3, 293 Camberwell RoadPO Box 178Camberwell, VIC 3124T +613 9522 0888F +613 9522 0899www.whk.com.auDear ShareholderWHK Group LimitedABN 93 006 650 693WHK Group Limited - Fiscal 2011 Full Year Results• Revenue of $406.1m, down 2%• Cash earnings per share of 9.8¢ down 9%• Operating cash fl ow of $35.6m (F10: $47.8m)• Final dividend of 4.0¢ per share (F10: 4.0¢) giving full year dividend of 7.0¢ pershare fully franked, up 17% (F10: 6.0¢)• Strong fi nancial position with gearing reduced further to 11% (F10: 14%)Solid Operating performanceWHK has delivered a solid operating performance in Fiscal 2011 in the face of tough businessconditions, particularly in New Zealand where natural disasters have also impacted. As predictedearlier this year the second half was challenging, with fi nancial markets continuing to be turbulent.Group revenue was down 2%, however pleasingly, Australian Business Services revenue was up1% (including 4% up in the second half). Financial Services revenue was down 3%, with investmentmarkets remaining fl at and retail investors continuing to maintain over-weight cash positions ordeferring retirement. New Zealand revenue was down 11%, although 3% is the currency translationeffect of a stronger Australian dollar.Consistent with strong management WHK has tightly controlled costs without impacting the company’sability to scale quickly to support growth plans for Fiscal 2012. Expenses and overheads combinedwere down 1%.continued over


Strong operating cash flow and financial positionCash fl ow from operations remains a strength with net debt falling to $31.5m (F10: $40.0m) whilstsignifi cantly increasing dividend payments to $18.4m (F10: $6.8m). Gearing reduced further to 11%(F10: 14%), and an excellent balance sheet was maintained.Record full year dividendAs previously forecast, a fi nal dividend of 4.0 cents (F10: 4.0 cents) was declared, giving a full yeardividend of 7.0 cents, up 17% (F10: 6.0 cents) and increasing the dividend payout ratio to cash EPSto 71% (F10: 55%). WHK expects to continue to maintain the dividend payout ratio at or above 70%going forward in the absence of significant acquisitions.The 2011 fi nal dividend is payable on 4 November 2011, with the record date for determiningentitlements to the dividend being 7 October 2011.Plotting a course for growthWhilst exceptional cash fl ow and strong cost control point to solid management, the focus is onorganic revenue growth. WHK has a strong foundation to drive the next phase of organic growth byleveraging its scale and enhancing value to its clients. WHK is seeking to establish a business thatwill support medium term double digit revenue growth.With improvements to the remuneration model for principals, the business is structuring to rewardperformance in alignment with organic revenue growth. Importantly, a new Shared Services modelfor support functions will be implemented during the year to drive further signifi cant operationaleffi ciency and cost reduction in later years.Yours faithfullyJohn LombardManaging Director

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