For personal use only

Transcription

1 Geoff McGrath Chairman Campbell Brothers Limited Annual General Meeting 11am on 31 July 2012 Shareholders, on behalf of the Board, I d like to thank you for your attendance today. As I am retiring at the conclusion of this meeting, I will have the incoming Chairman, Nerolie Withnall, present the overview of last year s performance followed by the Managing Director, Greg Kilmister, who will provide a more detailed review of last year s operational results and an update on recent developments. At the conclusion of Nerolie s address I will provide guidance on the company s expected profit for the half year ending September There are a number of motions being put to Shareholders later in this meeting and before handing over to Nerolie, I want to comment briefly on one of those motions; that being the change of name for the company to ALS Limited.

2 You will have an opportunity to comment on this motion later in the meeting. However, I wish to make the following points relating to this motion. Campbell Brothers Limited was listed on the Australian Stock Exchange in July 1952, and the Campbell name reflects the historical roots of the company. The company was founded by the Campbell family and up until 1990 Campbell Brothers was a well-recognised household brand, especially here in Queensland, as a provider of retail laundry products. Whilst we remain very proud of that heritage, the company has moved forward and is now a very different company to that of 1952 or even Our major business is now well and truly that of providing analytical testing services on a global scale. It has been this way for over a decade now and the future of your company is very much as one of the largest most respected global suppliers of testing services. And the brand associated with that testing business is ALS. ALS has over 300 sites, operates in 55 countries and employs more than 12,000 of the 13,000 people that work for the company. In Greg s address you will hear about the recent restructuring of ALS and why we are so confident in the opportunities and the future growth of that business. The change in name of the company from Campbell Brothers Limited to ALS Limited is not a revolution but rather an evolution. We are not walking away from the past but rather moving with confidence into the future. That future is ALS and I trust you will enthusiastically support this name change when the motion is put to this meeting. I now ask the Incoming Chairman, Nerolie Withnall, to provide an overview of the Company s performance for the past financial year. Thank you.

3 Nerolie Withnall Deputy Chairman Campbell Brothers Limited Annual General Meeting 11am on 31 July 2012 Thank you Geoff. Good morning ladies and gentlemen. Before I give an overview of the Company s performance for the past financial year, I d like to outline some of the main developments that have taken place during the year. The Company continued its strategy of business expansion and diversification in analytical testing and inspection services, including the industrial, environmental and the food and pharmaceutical testing markets. As outlined at last year s AGM, the Company successfully completed the acquisition of the UKbased Stewart Group, a global testing services provider to the minerals industry, for an

4 Enterprise Value of 222 million dollars. This acquisition was the single largest acquisition undertaken by the Company to date and was fully debt funded. This acquisition was in line with the Company s strategy to become a leading global provider of Testing, Inspection and Certification services. In October 2011, two strategic acquisitions were made by our Environmental and Industrial divisions. These were Columbia Analytical in the United States and Austpower Engineering in Australia. These two acquisitions gave us access to new geographies and technical capabilities and are firmly aligned to our long-term strategy of continuing to expand in markets where we can demonstrate a true competitive advantage. In early April this year, the Company made a further strategic acquisition in the Food and Pharmaceutical sector via the acquisition of UK-based Eclipse Scientific Group, including Advanced Micro Services in Ireland, for an Enterprise Value of 39 million dollars. This acquisition is in keeping with the Company s strategic plan to accelerate its growth in the food and pharmaceutical testing market in Europe. Greg will elaborate further on the Eclipse acquisition in his address. Now I'd like to give you an overview of the past years' results.

5 As shown, the Company achieved record levels of revenue and earnings for the year ended March Net profit after tax for the full year was 222 million dollars, an increase of 68 per cent on the profit achieved in the year. Earnings before interest, tax, depreciation and amortisation were 374 million dollars, an increase of 57 per cent on the previous year. Revenue was up 27 per cent to 1.4 billion dollars. The strong Australian dollar during the year impacted the translation of foreign earnings, with the average exchange rate against the US dollar being I will leave it to Greg to provide you with a more detailed review of individual divisional results. The Group s improved performance has significantly increased shareholder returns for the year. Earnings per share increased 62 per cent to $3.29 per share, in line with the increased profit. A final dividend of $1.30 per share, franked to 50 percent, was declared and paid on the 2 nd of July this year. This brought the total dividend paid to $2.25 per share, franked to 50 percent, an increase of 60 per cent on the previous year s dividend. Notably, the Company s dividend reinvestment plan was reintroduced this year in time for the final dividend, having been suspended following the interim dividend paid in December 2010.

6 Directors continue to be mindful of the percentage of earnings generated overseas and the impact that this has on the ability of the Company to frank dividends into the future. Although the Australian-based acquisitions undertaken over the past eighteen months have gone some way to increasing Australian taxable earnings, these will be offset by recent overseas acquisitions. As the Company operates in a global market place, and due to the overseas acquisitions, the capacity to maintain franking credits to a sufficient level is a challenge. Directors are hopeful of maintaining the current 50 percent franking for at least the next few years. Over the past three years, Campbell Brothers shares have outperformed its peers, achieving a total shareholder return of 600 percent, significantly higher than the 41.5 percent return from the All Ordinaries Accumulation index over the same period. Correspondingly, earnings per share increased by 155 percent over the same three year period, for a compound annual growth rate of 60 percent, outperforming the compound annual growth rate of 2.56 percent for companies in the ASX 200 Index. Other measures relating to the Company s continuing resilience and performance are shown in the Ten Year Summary at the back of the Annual Report.

7 As further testimony to the company s growth, on the 16 th September last year, the Company was included in the ASX 100 Index; this follows the Company s inclusion in the ASX 200 Index only three months earlier. Your company is now ranked 59 th by market capitalisation of companies listed on the Australian Securities Exchange. The Company is committed to developing a safe work culture across all of its sites and has had an active safety program in place for many years. For the year just ended, the safety performance, as measured by the Lost Time Injury Frequency Rate, increased from 2.8 to 3.0. Although this is a slight increase, if we look at the longer term trend we have seen a progressive decrease and this is very pleasing. We are committed to and will be striving for a return to a declining injury rate; ideally to a rate of zero harm. It should be noted that the Company s current Lost Time Injury Rate remains below the average of 3.5 reported for ASX 100 companies. The Company has adopted a more proactive approach in the monitoring of safety performance with the introduction of positive performance indicators, which measure process and proactive safety activities, not just incident rates.

8 By focusing on this aspect, the businesses can see how they are performing against the indicators, and increase their attention on proactive safety activities and risk management programs. During the year, our Organisational Development program focused on developing management and leadership programs as well as embedding diversity into the Company s culture and processes. We now offer significantly improved learning opportunities to all staff globally, with an on-line learning platform currently hosting more than 350 courses on a range of Technical, Core Skills, Health & Safety, and Leadership programs. Diversity continues to be a strong focus. Our Diversity policy has been in place for over a year now. We have set up the metrics on the gender composition of the global workforce with measurable objectives to be reported in the annual report from next year. I am pleased to report that there is a strong pool of quality professionals and managers in the Company to draw from as we move toward achieving a higher percentage of female executives.

9 During the year, two new Board appointments were made Grant Murdoch in September last year and John Mulcahy in February this year. On your behalf, I d like to take this opportunity of welcoming Grant and John to the Board. As they were appointed after last years AGM, resolutions will be proposed later in this meeting, seeking your support for their election as non-executive directors. At last year s meeting our Chairman, Geoff McGrath, announced his intention to retire from the Board at the conclusion of today s meeting. Although more will be said later in the meeting, for now, the Board and I m sure all shareholders here today, wish to thank you, Geoff, for your stewardship of the Company over the past 9 years and wish you all the best in the future. You leave a great legacy. In conclusion, I would like to pay tribute to the management of the company. Their efforts over the last twelve months have been nothing short of extraordinary. The performance of the past year reflects the outstanding leadership and contribution of our Managing Director, Greg Kilmister, and his strong and capable executive team. The year was one of unparalleled success. We have continued to invest in capacity, technologies, people and facilities. To Greg, his executive team, our managers around the world, and all of our staff, congratulations on an outstanding performance and a job well done. Your efforts are greatly appreciated by the Board and shareholders. I will now hand back to Geoff. Thank you.