ASX Announcement
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ASX Announcement 20 September 2016 2016 Annual Report Attached is Spotless’ 2016 Annual Report that is to be mailed today to shareholders who have elected to receive a hard copy. The 2016 Annual Report will be also be available online at www.spotless.com. Investor and analyst contact: Media contact: Geoff Bryant Julian Murphy General Manager, Investor Relations Corporate Communications Manager T +61 2 9816 9281 T + 61 7 3908 6347 M +61 419 684 900 M + 61 418 970 778 Spotless Group Holdings Limited ABN 27 154 229 562 549 St Kilda Rd, Melbourne VIC 3004 Australia www.spotless.com Page 1 of 1 Annual Report 2015 / 2016 1 Contents Creating Great Experiences ............................................................................................... 1 Business Overview ............................................................................................................ 2 Performance Highlights ..................................................................................................... 3 Chairman’s Letter .............................................................................................................. 4 Chief Executive Officer’s Report ......................................................................................... 6 Chief Operating Officer’s Update ........................................................................................ 9 Review of Operations ...................................................................................................... 10 Health, Education and Government ......................................................................... 10 Commercial and Leisure .......................................................................................... 11 Base and Township .................................................................................................. 12 Laundry and Linen ................................................................................................... 13 Executive Team ............................................................................................................... 14 Our Strategy .................................................................................................................... 16 Bringing the Strategy to Life ............................................................................................. 17 Exceptional People .......................................................................................................... 18 A Smarter Spotless .......................................................................................................... 22 Celebrating 70 Years of Taking Care of it .......................................................................... 23 Financial Statements for year ended 30 June 2016.......................................................... 25 Directors’ Report...................................................................................................... 26 Corporate Governance Statement ........................................................................... 72 Consolidated Statement of Profit or Loss and Other Comprehensive Income ........... 82 Consolidated Statement of Financial Position ........................................................... 83 Consolidated Statement of Changes in Equity.......................................................... 84 Consolidated Cash Flow Statement ......................................................................... 85 Notes to the Financial Statements for the year ended 30 June 2016 ........................ 86 Audit Independence Declaration ............................................................................ 134 Directors’ Declaration ............................................................................................. 135 Auditor’s Report ..................................................................................................... 136 Shareholder Information ................................................................................................. 138 Corporate Directory ....................................................................................................... 140 Our Values Putting Rolling up Leading Making every Finding people first our sleeves not following dollar count better ways 2 Creating Great Experiences Over the past 70 years, Spotless has grown from a shop front business in Melbourne to be Australia and New Zealand’s leading provider of integrated facilities services. Every day, we help thousands of clients run their businesses. Our team of 36,000 exceptional people and our flexible approach allow us to deliver tailored solutions across a diverse range of industry sectors. We are unmatched in our ability to deliver integrated services covering asset maintenance and management, catering and hospitality, cleaning, facility management, laundry management, mechanical and electrical, security and utility support services. Whether it be providing critical security for patients and clinical staff at hospitals, preparing nutritious meals at schools, delivering the optimum air-conditioned climate at an airport, maintaining public housing that accommodates tens of Top: South Bank TAFE, Brisbane thousands of people, laundering uniforms for factory workers, Public Private Partnership or making sure the elderly have clean rooms in an aged care Left: NAB cafe, Melbourne Alliance Catering residence, we’ll take care of it. 1 Business Overview Our People Market Segments We have 36,000 employees across 40 offices, and we are located in hundreds of our customers’ businesses. 200 6,200 3,000 2,900 4,500 630 10,000 8,300 270 Our Brands INTEGRATED FACILITIES SERVICES CATERING HVAC, MECHANICAL & ELECTRICAL UTILITIES SERVICES CLEANING SECURITY LAUNDRY AND LINEN ASSET MANAGEMENT 2 Performance Highlights Market Segments Over the past year Spotless’s great team delivered the following services that are essential to our customers: • Served food to 68 million customers • Catered for six million sports fans at stadia and major events • Maintained 75,000 homes in public housing estates • Washed 33 million sheets and 18 million industrial garments • Managed 2.2 million room nights, 315,000 check-ins in 23 remote mining accommodation camps • Delivered 4.4 million hours of service to a wide range of Australian and New Zealand healthcare providers • Provided 150 security guards daily for the Victorian Racing Club Melbourne Cup Carnival, Victoria • Purchased 5,013 tonnes of meat, poultry and seafood • Managed more than 52 million meter reads 3 Chairman’s Letter On behalf of the Board and management team, I am pleased to present shareholders with our annual report for the 2016 financial year. Spotless Group experienced a challenging year with short-term issues impacting our ability to hit growth targets. Despite these headwinds, the company delivered a steady result for shareholders in line with guidance provided in December 2015. Our Results Management and Board Spotless’ sales revenue for FY16 was up 10.6 On behalf of the Board, I extend a sincere thanks per cent on last year to $3.2 billion. We delivered to Chief Executive Officer Martin Sheppard and his statutory EBITDA of $312 million, down 1.5 per cent, management team for their hard work to improve while statutory NPAT was $122 million, down 14.4 business performance over the past 12 months. per cent. Our underlying EBITDA was $326 million, This new executive leadership successfully up 6 per cent, and underlying NPAT was $131 million, completed a strategy reset focused on winning down 4 per cent on last year. new customers and generating organic growth from our existing client base. The one-off items reflected in the result have been resolved and Spotless remains in a strong financial I would like to recognise my colleagues on the position. Reinforcing the Board’s confidence in the Board for their diligence and continued support. company’s future, your directors have declared a This year we were pleased to welcome Julie final dividend of 5.0 cents per share, bringing total Coates to our ranks and we remain committed dividends to 8.5 cents per share. to the ongoing renewal and development of our capabilities. During the year, Geoff Hutchinson Expanding our Service Offerings retired from the Board and Rob Koczkar will retire Spotless successfully delivered a broad range on 30 September 2016. I thank them both for of capabilities to integrated facilities management their great contribution to the business. contracts in FY16, generating value for clients and shareholders. Our new business win rate by number Thank You improved, while we recorded a contract renewal rate I also wish to congratulate Spotless’ 36,000 of 80 per cent. To ensure we continue to win large diverse and professional staff for their commitment contracts, management introduced additional rigour to working safely and delivering high quality to our bid process. services. Every day they partner with our valued customers and suppliers to create Spotless is the leading operator of social infrastructure great experiences. We are very proud of our Public Private Partnerships across Australia and New contributions to the communities we serve through Zealand. With a combined average tenure of more our various social and environmental programs. than 25 years, these contracts provide a secure, Importantly, I thank our clients and shareholders long-term revenue stream. for their confidence in this great company. We will continue to look for expansion opportunities