Working-Capital-Report-2016

PreparedbytheMcGrathNicol
CashandWorkingCapitalCentreofExcellence

11
Welcome
Theaverageworkingcapitalcycleofthesampled
companiesreducedin2016,“releasing”$370million
incash.Onaverage,managementteamswereable
toreducecollectionandinventorycyclestomore
thanoffsetthereductioninthepaymentcyclethey
experienced.Notallbusinesseswereabletoachieve
acashrelease.52%ofthesampleexperienceda
deteriorationinmetrics,meaningamaterialcompetitive
advantagecanbeachievedbyimplementingbest
practice.
Welcometothe2016McGrathNicolWorkingCapitalReport,preparedby
ourCashandWorkingCapitalCentreofExcellence.
Thisreportprofilestheworkingcapitalperformanceofasampleof147ASXlisted
companiesacrosstheBuildingProducts,Construction&Engineering,Food&
Beverage,Leisure,Media,Mining&Resources,Retail,Transport&Distributionand
Utilitiessectors.
Thecombinedmarketcapitalisationofthecompaniesincludedis$677.4billion,
representing83.5%ofthetotalfortheselectedsectors.Theinformationisbasedon
themostrecentfull-yearresultsfor2016,comparedto2015results.
Overall,theamountofcashtiedupinworkingcapitalfellin2016comparedto2015,
despitethemostmaterialmovementbeingashorteningofcreditorpayment
timeframeswhichabsorbscash.Managementteamswere(onaverage)ableto
reducedebtorcollectionandinventorycyclestomorethanoffsetthechange.
Thismeansthatmarketparticipantsatbothendsofthesystemareimproving
collections.Suppliersaregettingbetteratcollectingmorequicklysobusinesses
mustimprovetheirowncollectionsorexperienceacashdrain.
Resultsvariedmateriallywithinsectors,withsomemanagementteamsachieving
areductioninnetworkingcapitaldayswherethemajorityofbusinessesintheir
sectorexperiencedanincrease.Themostsignificantimprovementswereachieved
bymanagementteamswhoimplementedfocusedworkingcapitalimprovement
programs.
Thefollowingpagesincludeouranalysisforeachsector.Informationabout
ourCashandWorkingCapitalCentreofExcellence,includingcontactdetails,
isprovidedattheendofthisreport.
Jason Ireland
Partner, McGrathNicol Advisory
+61293382694
+61434144958
jireland@mcgrathnicol.com

Days
-10
10
30
50
70
90
80
60
40
20
-
Construction &
Engineering
RetailLeisure MediaBuilding
Products
UtilitiesTransport &
Distribution
Full sampleMining &
Resources
Food &
Beverage
67.3
45.8
49.5
1.9
78.0
33.6
40.5
51.0
DWC at 30 June (or latest available)
2015 2016
SUMMARY
41.7
81.4
Average DWC by sector
Summary sample
Days 2015 2016 Change
DSO 42.9 42.1 (0.8)
DIO 70.7 70.3 (0.4)
DPO 56.9 54.2 (2.7)
DWC 51.3 51.0 (0.3)
DSO =Dayssalesoutstanding(debtors)
DIO =Daysinventoryoutstanding(inventoryheld)
DPO =Dayspurchasesoutstanding(creditors)
DWC=Daysworkingcapital(networkingcapital)
Fordetailsofthebasisofpreparationandcalculations,seepages13and14.
2
Cash and Working Capital
Centre of Excellence
AverageDaysWorkingCapital(DWC)
in2016was51.0days,representinga
0.3dayreductionfrom2015,“releasing”
c.$370millionincashfromthecombined
workingcapitalcyclesofoursampled
companies.
Asshowninthetablebelow,onaverage,
managementteamsreducedthecash
tiedupininventory(0.4dayreduction
ininventorydaysorDIO)whilstalso
reducingtheirdebtordays(DSO)by
0.8daysthroughbetterbillingand
collectionsperformance.Creditorswere
paidmorepromptlythanin2015(creditor
days,orDPO,reducedby2.7days).Our
experiencesuggeststheDPOreduction
wasacombinationofbusinessesshoring
uppreviouslystretchedsupplychains
(bypayingmorepromptly)andcreditors
improvingtheircollectionprocesses.
Differentforceswereatplaywithin
eachsectorandresultsvariedacross
sectors.Forinstance,twosectors
actuallypaidcreditorsmoreslowlythan
in2015.Oftheprofiledcompaniesthat
reducedtheirDWC,therewasareported
focusondrivingbetterprocesses
whichdemonstratesthatsustainable
improvementrequiresfocusanda
concertedprogramofchange.
Whilsttherewasanoverallreductionin
networkingcapital,underlyingresults
weremixedwith52%oftheprofiled
companiesandfourofthenineindustries
reportinganincreaseinDWC.The
biggestreductionswereachievedin
theTransport&Distribution,Mining&
ResourcesandRetailsectors.Utilities
andBuildingProductsalsoimproved.
TheConstruction&Engineering,Media,
LeisureandFood&Beveragesectors
recordedanincreaseinaverageDWC.
Thesampledcompaniesrecordedlower
revenueandprofitin2016thanin2015.
Managementfocusonworkingcapital
duringsuchtimescanresultinamaterial
competitiveadvantage.
Theefficientconversionofearningsinto
cashflowcanunderpinamorenimble
businessandprovideanopportunity
tomakecapitalexpenditureandother
strategicdecisionsmorequicklyand
confidently.Itcanalsohelpmaintainor
improverelationshipswithsuppliers.
Withinfourofthesectorsthegap
betweenthe“best”and“worst”DWC
was100+days.ForBuildingProducts,
animprovementintheDWCofasmall
numberofsampledcompaniesresulted
inanimprovementinthesectoraverage,
despitethemajorityofcompanies
recordinganincreaseinthelevelofcash
tiedupinworkingcapital.
Thefollowingpagesprovideabreak
downbysectorandhighlightthestronger
performersrelativetotheprioryear.
Overall improvement driven by lower debtor and inventory days. The Transport &
Distribution and Mining & Resources sectors saw the largest improvements (lower
DWC) while the Leisure and Food & Beverage sectors recorded the largest increase
in average DWC.
Summary

Peer group
average
Fletcher
Building Limited
GWA Group
Limited
Adelaide
Brighton Limited
CSR Limited Boral Limited
Days
0
20
40
60
80
100
77.0
62.2
78.4
70.1
78.0
48.5
2015 2016
Top 5 DWC improvements - Building Products
Best & Worst
Days Best Worst Spread
DSO 40.1 62.1 22.0
DIO 53.8 198.4 144.6
DPO 110.9 25.8 (85.1)
DWC 48.5 144.4 95.9
Building Products
DSO 52.9 52.0 (0.9)
DIO 100.5 100.5 -
DPO 61.7 60.1 (1.6)
DWC 78.2 78.0 (0.2)
Fletcher Building Limited
DSO 64.6 55.3 (9.3)
DIO 83.9 79.8 (4.1)
DPO 50.7 50.9 0.2
DWC 89.6 77.0 (12.6)
3
Anumberoffactorsinfluencedthe
BuildingProductssectorin2016including
thenegativeeconomicconditionsin
someregionaleconomiesandcontinued
lowerspendingintheminingand
resourcessector.Whilegovernment
fundedinfrastructureinvestmentwas
positive,themajorboostcamefromnew
residentialhousingconstructionswhich
reachedrecordhighsin2016,drivinga
4.7%increaseinrevenueanda10.6%
increaseinEBITDAacrossthesampled
companies.
OverallDWCremainedrelativelystable
withonlya0.2dayimprovement,
howeverresultsvariedmaterially(only
30%ofthesampleimproved)andthegap
betweenthelowestandhighestDWC
increasedto95.9days.
Significantlevelsofinventorymeans
thissectorhasthesecondhighest
DWCofthesampledsectors.Some
businesseshavearetail-likefocus,selling
totradecustomerswhileothersservice
constructioncompaniesanddevelopers
–bothcustomertypesrequirerapid
accesstoproductandtimetopay.
ThereissomecontroloverDSObecause
clientsrequiretheproductstocomplete
projectsandoftenbuytouserather
thanholdinginventorythemselves,
howeverthereisoftenpressurefrom
construction/developerclientstoprovide
longertermstomatchthosethey
experience.In2016,aswasthecasein
2015,BuildingProductscompanies(on
average)wonthatstrugglewithDSO
reducingby0.9days,howeverresults
weremixedwith50%ofthecompanies
experiencinganincreaseinDSO.
Withtheheavyinvestmentininventory,
inventorymanagementisthe
differentiatorinthesector.Whilethere
wasnochangeinaverageDIO,50%of
thecompaniessampledreducedtheir
DIO(thetopfouroverallDWCperformers
allimprovedthismetric).
60%ofthesampleexperienceda
shorteningofDPOandfourofthe10
companiespaidtheirsuppliersonshorter
termsthantheycollectedfromtheir
customers,emphasisingtheworking
capital“pinch”inthissector.
FletcherBuildingreduceditsDWCby
12.6daysto77.0daysonthebackofa
reductiontoDSOandDIOmetricsand
theunderlyingquantumofreceivables
andinventory,despiteoverallgrowthin
itsbusiness.
AslightimprovementindebtorcollectionsresultedinanoverallreductioninDWC,
howeveronly30%ofthesampleimproved.
“Theimprovementinworking
capital,notwithstanding
continuedinvestmentin
residentialland,reflectedthe
successofspecificinventory
anddebtormanagement
initiativesduringtheyear.”
Sir Ralph Norris and Mark Adamson
Chairman of Directors and Managing
Director
Fletcher Building Limited
2016 Annual Report
BuildingProducts

Cardno
Limited
Ausdrill
Limited
Service Stream
Limited
UGL
Limited
Watpac
Limited
Peer group
average
Days
0
50
100
150
200
57.5
141.4
76.0
37.7
44.3
67.3
2015 2016
Top 5 DWC improvements - Construction & Engineering
Best & Worst
DSO 38.1 105.5 67.4
DIO - 129.4 129.4
DPO 55.6 4.9 (50.7)
DWC 22.1 141.4 119.3
Construction & Engineering
DSO 63.9 65.2 1.3
DIO 33.0 33.1 0.1
DPO 29.0 29.6 0.6
DWC 66.2 67.3 1.1
Cardno Limited
DSO 88.0 59.8 (28.2)
DIO 53.1 37.2 (15.9)
DPO 43.8 39.7 (4.1)
DWC 96.3 57.5 (38.8)
4
Collectionsslowed,drivinganetincreaseinDWC.
Theongoingcontractioninmining
investmentcontributedtoadecline
inactivityandrevenuesin2016.
Whilesomecompanieswereable
totakeadvantageoftheupliftin
infrastructurespending,thecombined
revenueofoursampledcompaniesfell
11.1%from2015.
Workingcapitalmanagementiskeyin
thissectorbecausesuppliersareoften
paidtwiceasquicklyascashiscollected
fromcustomers.Thereisoftenlimited
flexibilityintradecreditortermsbecause
supplyisessentialtokeepprojectson
target.Thelargelabourelementinthe
costbasemeansregularcashoutflows
withnotimingflexibility.Thismeans
billingandcollectionprocessesmustbe
efficientorparticipantscanfaceliquidity
pressure.
OnthefaceofitaDWCincreasewithin
oursampledcompaniesof1.1days
looksrelativelystable,howeverthe
dollarquantummeanseveryportion
ofadaycountsinthisindustry.Overall,
thesampledcompaniestook1.3days
(DSO)longertocollectfromclients
andwereonlyabletoincreasethetime
theytooktopaysuppliersby0.6days
(DPO).Inventorylevels(DIO)remained
relativelystablefollowingmaterial
improvementsin2015meaningthe
roomforfurtherDIOimprovementmay
belimited,althoughwenotematerial
variancesinperformancesatthe
individualcompanylevel.
Thekeyfeatureofthesectorwas
themixedresultsofthesampled
companies.Ofthe17companies,
sevenwereabletoshortentheir
workingcapitalcycles(reducingDWC),
whiletheremainingtenshoweda
deteriorationintheirmetrics.Inasector
whereachievingrevenueandmargin
growthischallenging,workingcapital
managementpresentsanopportunity
formaterialcompetitiveadvantage.
Themostnotableimprovementin2016
wasbyCardno,reducingitsDWCby
38.8days(40%)to57.5,assistedbythe
disposalofitsATCbusinessandECS
miningbusinesswhichwere“heavy”
workingcapitalbusinesses.Ausdrill,the
secondbestperformer,alsobenefited
fromthedisposalofaninventory-heavy
businessthroughtheyearsellingDrilling
ToolsAustralia.WhilebothCardnoand
Ausdrillbenefitedfromthesesales,
underlyingmetricsalsoimproved.
“AsatJune2016,thenetdebt
hadreducedto$50millionasa
resultofassetsales,twocapital
raisingsandastrongfocuson
workingcapital.”
Michael Alscher
Chairman
Cardno Limited
2016 Annual Report
Construction
&Engineering

Best & Worst
DSO 17.7 97.8 80.1
DIO 29.5 220.9 191.4
DPO 170.2 10.9 (159.3)
DWC (11.9) 200.2 212.1
Food & Beverage
DSO 53.8 53.9 0.1
DIO 97.1 107.8 10.7
DPO 74.2 71.3 (2.9)
DWC 76.0 81.4 5.4
Australian Agricultural Company Limited
DSO 32.2 17.7 (14.5)
DIO 212.0 187.2 (24.8)
DPO 25.0 17.0 (8.0)
DWC 257.8 200.2 (57.6)
Top 5 DWC improvements - Food & Beverage
Australian
Agricultural
Company
Limited
Freedom
Foods Group
Limited
Refresh Group
Limited
Treasury
Wine Estates
Limited
Tassal Group
Limited
Peer group
average
Days
0
50
150
100
200
250
300
200.2
117.0
64.7
184.5
25.0
81.4
2015 2016
5
In2016Food&Beveragecompanies
performedstronglyintermsof
profitability,withrevenueandEBITDA
growing9%and24%respectively.
Withamixofproducersandprocessers
inoursample(includingagricultural
companiesforthefirsttime),inventory
managementisthekeydriverofworking
capitalperformance.Supplyingthe
largesupermarketsheavilyinfluences
theworkingcapitalcycleofanumberof
participants.
Thissectorhasthehighestaverage
DIOandDWCofallsampledsectors.
TheaverageDWCofthesampled
companiesincreasedby5.4daysto
81.4daysin2016,drivenbya10.7day
increaseinDIOanda2.9daycontraction
inDPO.DSOremainedrelativelystable.
BoththeagriculturalandtraditionalFood
&Beveragecompaniesrecordedsimilar
DIOandDWCtrends.Whiletherewasan
overallmaterialincreaseinDWC,sevenof
the18companies(39%)actuallyachieved
areductioninDWC.
Ofthe11sampledcompaniesthat
showeddeteriorationinDWC,nine
experiencedanincreaseinDIO.Themost
materialincreasesinDIOwerereported
byBlackmores(100.8dayincreaseto
194.2days),Bellamy’sAustralia(90.3day
increaseto153.3days),andCapilano
Honey(56.5dayincreaseto171.6days).
Allthreecompaniesincreasedinventory
balancesinordertomeetextraordinary
demandfortheirproducts.
Ofthebestperformingsampled
companies,AustralianAgricultural
Companyrecordeda57.6dayreduction
inDWC(to200.2days)asaresultof
a24.8daydecreaseinDIO(to187.2
days).Managementnotedthatthe
improvementwasachievedthrough
achangeinproductmix,andfrom
purchasinglowerquantities(buthigher
quality)livestockduringaperiodofsales
growth.
“AACo’sfuturegrowthstrategy
islargelycentredonfurther
strengtheningourleadership
positionsandcontinuingto
focusonsupplyingpremium
productstokeycustomers
andmarketsgloballywhile
maximisingourshareofmargin
fromthesupplychain.”
Donald McGauchie
Chairman
Australian Agricultural Company
Limited
2016 Annual Report
HighestaveragesectorDWCasaresultof10.7dayincreaseininventorydays(DIO).
Food&Beverage

0
10
20
30
40
(10)
(20)
Days
Peer group
average
Skydive the Beach
Group Limited
Elanor
Investors Group
Ardent Leisure
Group
Crown Resorts
Limited
The Star
Entertainment
Group Limited
8.6
33.4
11.2
(19.4)
1.9
2015 2016
18.0
6
Top 5 DWC improvements - Leisure
Best & Worst
DSO 10.9 57.6 46.7
DIO 0.4 38.3 37.9
DPO 217.6 12.4 (205.2)
DWC (44.3) 33.4 77.7
Leisure
DSO 24.0 26.2 2.2
DIO 15.6 12.8 (2.8)
DPO 70.5 62.5 (8.0)
DWC (2.9) 1.9 4.8
TheLeisuresectorisdirectlylinkedto
consumerconfidenceanddiscretionary
spending.Despitedecade-lowwages
growth,consumersareallocatingmore
oftheirdisposableincometotraveland
leisure,helpedbycontinuedlowinterest
rates.Thisdrovea7.3%increasein
revenueanda9.5%increaseinEBITDA
acrossthesampledcompanies.
Thelevelofchangeinthissectorwas
prevalentin2016with70%ofthesample
undertakingmergerandacquisition
activities,ascompaniessoughtto
captureadditionalmarketshareand
profitsinthebuoyantmarket.
Thissectoralsoincludesalotof
internationaloperation,with70%of
sampledparticipantsoperatinginatleast
twocountries.Thebusinessessampled
operatearangeofbusinessmodels,
howevergenerallynetDWCacrossthe
sectorislowerthanothersectors.70%of
thesampledcompaniescollectfromtheir
customersonshortertermsthanthey
paytheirsuppliers,withfourrecording
negativeDWCin2016.
AverageDWCacrossthesample
increasedby4.8daysto1.9daysin2016.
Thiswasdrivenbyan8dayshortening
ofthetimeframetakentopaysuppliers
(DPO)coupledwitha2.2dayincreasein
thetimetakentocollectfromcustomers
(DSO),partiallyoffsetbya2.8day
reductioninDIO.
Whiletherewasanoverallmaterial
deterioration,theunderlyingresultsshow
that30%ofthesampledcompanies
improvedtheirworkingcapitalcycles
(reducingDWCyear-on-year).
Thefourcompanieswhoenjoynegative
DWCexperiencedadeteriorationin
DWCillustratingtheimportanceof
maintainingfocusonworkingcapital
regardlessofthesector.
Slowercollectionsandshorterpaymenttermsdroveamaterialincrease,however
LeisurestillhasthelowestaverageDWCofthesampledsectors.
Leisure
Skydive the Beach Group Limited
DSO 27.4 15.5 (11.9)
DIO 32.4 17.0 (15.4)
DPO 34.2 12.4 (21.8)
DWC 26.5 18.0 (8.5)

20
40
60
80
100
0
(20)
Days
Peer group
average
APN News &
Media Limited
Sky Network
Television
Limited
NZME.
Limited
APN Outdoor
Group Limited
News
Corporation
(8.8)
9.3
56.6
74.5
41.7
2015 2016
7.6
7
Top 5 DWC improvements - Media
Best & Worst
DSO 24.4 128.2 103.8
DIO - 16.8 16.8
DPO 107.6 6.8 (100.8)
DWC (8.8) 74.5 83.3
Media
DSO 67.3 68.1 0.8
DIO 3.9 3.8 (0.1)
DPO 47.1 45.2 (1.9)
DWC 40.2 41.7 1.5
APN News & Media Limited
DSO 57.0 54.6 (2.4)
DIO 4.4 3.5 (0.9)
DPO 62.3 64.8 2.5
DWC 13.8 7.6 (6.2)
ThesampledMediacompanies
experienceda9.3%declineinearningsin
2016duetothecompetitiveenvironment
andincreasedinvestmentrequiredto
establishnewerincomestreams.
Thelevelofchangeintheindustrywas
highlightedbythefactthatallofthe
sampledcompaniesundertooksome
formofrefinancingand/orrestructuring
(includingdivestingunderperforming
businessunits)ineither2015or2016.
Intermsofworkingcapitalperformance,
averageDWCincreased1.5daysto
41.7daysin2016.Thiswasdrivenbya
0.8dayincreaseinDSOcoupledwitha
1.9dayreductioninDPO.
Whiletherewasanoverallincreasein
DWC,38%ofthesamplegeneratedcash
flowbyreducingtheirDWC.
ThesampleaverageDSOof68.1days
isthehighestofthesectorsreviewed.
Thereforeitistheelementofworking
capitalwheremarketparticipantscan
differentiatethemselvesandgaina
competitiveadvantage.Ofthefive
companiesthatshowedanimprovement
inDWC,fourofthemachieveditby
reducingDSO(APNOutdoorGroup
leadingthewaywitha9.1dayreduction
inDSO).Conversely,oftheeight
companiesthatexperienceda
deteriorationinDWC,sevenofthese
recordedanincreaseinDSO.
Inasectorwithtraditionallyminimal
inventoryandastructural“fundinggap”
for69%ofthesample(meaningthe
companiespaytheirsuppliersonshorter
termsthantheycollecttheirdebtors),
generatingadditionalliquidityisreliant
ontheabilityofmanagementteams
todriveefficienciesthroughbillingand
collectioncycles.
“Cashflowsbeforetheimpact
ofacquisitionsanddisposals
was$78.2m.Thisstrongresult
reflectstheGroup’scontinued
focusoncashmanagement.”
APN News & Media Limited
Operating and Financial Review
Annual Report
AnincreaseinDWC,drivenbyanincreaseindebtordaysandreductionincreditordays.
Media

Top 5 DWC improvements - Mining & Resources
Best & Worst
DSO 2.6 66.3 63.7
DIO 29.9 315.2 285.3
DPO 299.6 13.1 (286.5)
DWC 5.9 236.7 230.8
Mining & Resources
DSO 27.1 25.7 (1.4)
DIO 99.3 100.4 1.1
DPO 64.6 68.2 3.6
DWC 51.7 45.8 (5.9)
Whitehaven Coal Limited
DSO 44.8 21.3 (23.5)
DIO 78.9 41.6 (37.3)
DPO 41.2 34.6 (6.6)
DWC 65.1 24.8 (40.3)
8
Shortercollectionandlongerpaymentcyclescontributedtoasignificant
reductioninDWC.
“Cashgeneratedfrom
operationsof$269.3m
increasedby76%fromthe
prioryear.Theimprovement
isdueto…anetreductionin
inventoryduringtheyear…”
The Hon. Mark Vaile AO
Chairman
Whitehaven Coal Limited
2016 Annual Report
Followingasustainedperiodoflow
commoditypricesthesampledMining&
Resourcescompaniesexperiencedfalls
inrevenueandEBITDAof19.3%
and30.3%respectivelyin2016.
Overalltherewasanetreleaseofcash
fromworkingcapital.Theaverage
DWCofthesampledcompaniesreduced
by5.9daysto45.8daysin2016,driven
bya1.4dayreductioninDSOanda
3.6dayincreaseinDPO.Therewas
aslightuptickinDIO(1.1daysor
1%)afteraconcertedeffortin2015
bymanagementteamstoreduce
inventoriestolevelsthatbetter
reflectedtheoperatingenvironment.
Thereisabroadrangeofsizesand
operatingmetricsinthesample,and
severalofthesampledcompanies
recordedsubstantialswingsintheir
metrics,largelydrivenbythesignificant
variabilityinyear-on-yearrevenue
andCOGS.Toillustratethispoint,the
spreadbetweenthehighestandlowest
DWCwas230.8days.In2015itwas
71.0days.
Ofthe22sampledcompanies,14(64%)
reducedtheirDSOandthisisasector
withthesecondlowestaverageDSO
ofallsampledsectors.Thisillustrates
thatwithaconcertedfocusonworking
capitalmanagementprocesses(just
likeotheroperationalprocesses)
improvementscanbefoundinall
industries.WhileDSOimprovements
weremade,thelargestdriveroflower
DWCwasanaverageincreaseinthe
timetakentopaysuppliers.Onlysixof
thecompanieswhoreducedDSOused
theadditionalcashtopaysuppliersmore
quickly(reducingDPO).
AverageDIOincreased,howeveronly
45%ofthesampleincreased.Various
commentaryinannualreportsnoted
increasedinventorystockpiling(because
ofreducedsales),acceleratedmining
(totakeadvantageofthecurrentcost
curve),andnewlyidentified/acquiredor
betterqualityreserves.
WhitehavenCoal,YancoalAustralia
andResoluteMiningrecordedthe
largestimprovements,unlockinga
combinedtotalof$297millionincash
fromworkingcapital.
0
20
40
60
80
100
120
140
160
Days
Whitehaven
Coal Limited
Yancoal
Australia
Limited
Resolute
Mining
Limited
OceanaGold
Corporation
OZ Minerals
Limited
Peer group
average
24.8
6.6
119.4
12.7
74.0
45.8
2015 2016
Mining&Resources

0
20
40
60
120
80
100
140
160
110.9
105.7
13.3
81.4
71.2
49.5
Gazal
Corporation
Limited
Retail Food
Group Limited
AMA Group
Limited
GUD Holdings
Limited
Kathmandu
Holdings
Limited
Peer group
average
Days
2015 2016
9
“ActiontakenduringFY2016
toimproveoperatingmargins
deliveredsalesgrowthat
increasedgrossmargins,
loweroperatingexpensesasa
percentageofsales,reduced
investmentinworkingcapital
andstronglypositiveoperating
cashflows.”
Xavier Simonet
Director and Chief Executive Officer
Kathmandu Holdings Limited
2016 Annual Report
Best & Worst
DSO - 107.3 107.3
DIO 5.9 273.7 267.8
DPO 185.4 8.4 (177.0)
DWC (31.8) 112.8 144.6
Retail
DSO 26.3 24.2 (2.1)
DIO 111.9 105.0 (6.9)
DPO 58.0 50.2 (7.8)
DWC 50.3 49.5 (0.8)
Retail Food Group Limited
DSO 136.4 107.3 (29.1)
DIO 96.2 55.3 (40.9)
DPO 75.0 49.6 (25.4)
DWC 150.3 110.9 (39.4)
Top 5 DWC improvements - Retail
RetailsalesasreportedbytheABS
grew2.8%in2016,whichwasbelow
theseasonallyadjustedGDPgrowth
of3.3%,howeverperformancevaried
considerablyacrosscategories.
Traditional“discretionary”categories
outpacedGDP,linkedtoincreased
discretionaryincomeonthebackof
continuedlowinterestrates.Other
categoriessuchashouseholdgoods
andfoodretailingwerelower.
Revenuewithinthesampledcompanies
grewby3.6%,howeverEBITDA
decreasedby9.9%,indicatingcontinued
marginpressure.
DWCimprovedby0.8daysin2016
to49.5days,howeverwithinthat2%
improvementweresomelargevariations
inindividualresultsandsomematerial
changesintheindividualelementsof
workingcapital.
RetailhasthelowestaverageDSO
ofallindustriessampled,whichisto
beexpectedgiventhemajorityof
participantsoperatea“traditional”retail
model,receivingpaymentatthepoint
ofsale.Therewashowevera2.1day
improvementinDSOacrossthesample.
Whilethereareanumberofdifferent
businessmodelswithinthesector,even
businessesoperatingmoretraditional
retailmodelswereabletoreduceDSO
evenfurther.
Workingcapitalmanagementinretailis
allaboutinventorymanagementandwith
thatarequirementtomanagesupplier
paymentterms.AverageDIOreduced
byaverymaterial6.9days,howeverthat
improvementwasmorethanoffsetbya
7.8dayreductioninDPO.
Foranumberofentitiesthereduction
ininventoryfreedupcashtoreduce
creditorpressurethathadbuiltinthe
previousyear. Inventorymanagement
continuestobeakeydifferentiator.In
2015only42%ofthesamplemanaged
toreduceDIO,however66%ofthe
sampleachievedareductionin2016.
Reductionininventoryanddebtordaysmostlyoffsetbyshorterpaymentdays.
Retail

Best & Worst
DSO 35.8 75.0 39.2
DIO 0.4 94.6 94.2
DPO 62.3 7.0 (55.3)
DWC 5.0 63.8 58.8
Transport & Distribution
DSO 58.0 52.8 (5.2)
DIO 28.4 25.4 (3.0)
DPO 43.1 42.2 (0.9)
DWC 46.2 40.5 (5.7)
Royal Wolf Holdings Limited
DSO 45.9 40.2 (5.7)
DIO 88.8 69.4 (19.4)
DPO 27.3 48.9 21.6
DWC 75.3 51.9 (23.4)
Top 5 DWC improvements - Transport & Distribution
10
LargestpercentagedecreaseinaverageDWCdrivenbylowerdebtorandinventorydays.
“Workingcapitalhasimproved
ontheprioryearwithcontinued
focusoninventorymanagement
andcashflowmanagement.”
Mr Robert H Wylie and Mr Michael Alan
Brockhoff
Directors
MaxiTRANS Industries Limited
2016 Annual Report
Thedeclineinactivityandrevenues
forparticipantsintheConstruction&
EngineeringandMining&Resources
sectorsin2016hadaflowonaffectto
theTransport&Distributionsector.
Averagesectorrevenuecontractedby
1.7%during2016,andallbuttwoofthe
sampledcompaniessawadeclineinyear-
on-yearEBITDA.
Intermsofworkingcapitalperformance,
averageDWCacrossoursample
reducedby5.7days(12%),thelargest
improvementofallsectorssampled.This
resultwasdrivenby5.2dayreductionin
DSOanda3dayreductioninDIO.
NotwithstandingtheDSOimprovement,
astructural“fundinggap”remainedin
thesector.67%ofsampledcompanies
paidtheirsuppliersmorequicklythan
theycollectedfromtheirdebtors.For
thefreightoperatorsespecially,whose
customersarealsofeelingaprofitpinch
andmaylooktosoftenthepainby
extendingpaymentterms,continued
focusonbilling,collectionandsupply
chainefficienciesiscritical.
WhilethemetricsforRoyalWolfHoldings
andMMAOffshore(DWCreductionsof
23.4and22.8days,respectively)drove
thesizeoftheimprovement,67%ofthe
sampleimprovedDWC.
RoyalWolfHoldings’reductioninDWC
wasdrivenbya19.4dayfallinDIOas
managementimplementedtighter
controlsaroundinventoryandrelated
purchases.Attheotherendofthe
sample,thethreecompaniesthat
experienceddeteriorationinworking
capitalmetricsallrecordedanincrease
inDSOandadecreaseinDPO.Given
thecriticalnatureofinputsdrivingDPO
inthissector(fuel,contractlabourand
warehousing),reversingthistrendcan
bedifficult.
Days
0
20
40
60
80
100
Peer group
average
Royal Wolf
Holdings
Limited
MMA Oﬀshore
Limited
MaxiTRANS
Industries
Limited
K&S Corporation
Limited
Lindsay
Australia
Limited
51.9
61.2
63.8
5.0
40.5
2015 2016
TRANSPORT - headings
34.8
Transport&Distribution

11
Peer group
average
AusNet
Services Limited
APA Group Contact Energy
Limited
Energy World
Corporation
Origin Energy
Limited
Days
0
60
20
40
50
70
10
30
45.5
32.4
5.7 6.2
43.2
2015 2016
33.6
UTILITIES
Top 5 DWC improvements - UtilitiesBest & Worst
DSO 14.9 64.7 49.8
DIO - 201.2 201.2
DPO 188.0 - (188.0)
DWC 5.7 65.0 59.3
Utilities
DSO 44.2 43.0 (1.2)
DIO 40.0 41.3 1.3
DPO 58.5 56.6 (1.9)
DWC 34.9 33.6 (1.3)
APA Group
DSO 59.9 45.9 (14.0)
DIO 141.2 70.1 (71.1)
DPO 197.3 77.0 (120.3)
DWC 57.9 45.5 (12.4)
ImprovedDWCdrivenbyareductioninDSO.
“Earningsareunderpinned
bysolidcashflows
generatedfromhighquality,
geographicallydiversified
assetsandaportfolioofhighly
creditworthycustomers.”
APA Group
Directors’ Report
2016 Annual Report
TheUtilitiessectorcontinuesto
becharacterisedbyhighlevels
ofcompetition,marginpressure,
regulatoryscrutinyandadvancements
intechnology.Despitethis,theaverage
revenuesofthesampledcompanies
increasedby4.2%in2016.Thefocus
onoperationalcost-cuttinginitiatives
reportedbyanumberofcompanies
contributedtoanaverageincreasein
EBITDAof13.4%in2016.
Akeythemeacrossthesamplethat
impactedbothoperatingresults
andworkingcapitalmetricswasthe
acquisitionanddivestmentofenergy
generationassets.Thisactivitywas
reportedinboth2015and2016asa
wayforsomecompaniestogrownew
revenueandimprovethequalityof
earnings.
Overall,DWCfellby1.3daysto33.6days
in2016,drivenbya1.2dayreduction
inDSO.Interestingly,fouroutofthe
topfiveperformingcompaniesinour
samplereportedincreasedinvestment
inbillingandcollectionsystemstodrive
betterproductivityandimproveddebtor
management.ThefallinDSOallowed
companiestopaytheirsuppliersmore
quickly(asreflectedbythe1.9day
reductioninDPO).
Whilesomeresultswerematerially
impactedbyacquisitionsand
divestments,strongimproversinthe
sectorincludedOriginEnergy,AusNet
ServicesandAPAGroup.APAGroup
reduceditsDWCby12.4days,which
contributedtoanetoperatingcashflow
of$862.4million,notingitsresultsalso
benefitedfromthefullyearimpactofthe
WallumbillaGladstonePipeline(acquired
in2015)andtheexpandedEastCoast
Grid.
Utilities

12
Authors
JasonIreland
SeanWiles
SijmonvanLoon
CarloLucci
OurCashandWorkingCapitalCentre
ofExcellenceisfocusedonincreasing
cashflowbyimplementingpractical
andeffectiveprocedurestoforecast,
track,saveandgeneratecash.We
helpbusinessestoimprovecashflow
andgivethemthetoolstosustain
improvements.
OurCentreofExcellenceprogramfor
CFO’sandfinancestaffprovidestraining
andadviceonbestpracticecashand
workingcapitalmanagement.
Ifyouareinterestedinparticipating,
orhavingastaffmemberattenda
CentreofExcellenceprogram,please
contactJasonIrelandorSeanWiles.
Statecontacts
Sydney
JasonIreland
+61 2 9338 2694
jireland@mcgrathnicol.com
SeanWiles
+61 2 9248 9986
swiles@mcgrathnicol.com
JasonPreston
+61 2 9338 2655
jpreston@mcgrathnicol.com
Adelaide
SamDavies
+61 8 8468 3710
sdavies@mcgrathnicol.com
TheaEszenyi
+61 8 8468 3705
teszenyi@mcgrathniol.com
Brisbane
Anne-MareeKeane
+61 7 3333 9830
akeane@mcgrathnicol.com
AnthonyConnelly
+61 7 3333 9806
aconnelly@mcgrathnicol.com
Canberra
ShaneO’Keeffe
+61 2 6222 1420
sokeeffe@mcgrathnicol.com
Melbourne
RobertSmith
+61 3 9038 3166
rbsmith@mcgrathnicol.com
MatthewCaddy
+61 3 9038 3157
mcaddy@mcgrathnicol.com
Perth
RobKirman
+61 8 6363 7685
rkirman@mcgrathnicol.com
Researchteam
GraceChessman
TimothyDuncan
StevenHandley
SummerNguyen
ThomasScarf
JohnathonTawil
JordanTrovato
CashandWorkingCapital
CentreofExcellence

13
Basisofpreparation
Peergroupclassification
TheBuildingProducts,Construction
&Engineering,Food&Beverage,
Leisure,Media,Mining&Resources,
Retail,Transport&Distribution
andUtilitiespeergroupsamples
underpinningthisreporthavebeen
selectedaccordingtotheGlobal
IndustryClassificationStandard
(“GICS”)listedinthetableopposite.
Accountingperiods
Financialinformationinthissurvey
drawsonmostrecentlypublishedfull
yearaccountsasat26October2016
(i.e.themostrecentlypublishedfull
yearfinancialinformationpriorto
thisdatehasbeenused).Prioryear
comparablefiguresmaydifferfrom
our2015reportforcompaniesin
thesamplethatadjustedtheir2015
accountsfollowingthereleaseof
ourreportorrestatedthemwhen
presentingcurrentyearresults.
Adjustmentsmayoccuriftherehas
beenachangeinaccountingpolicy.
Peergroupsample GICSgroupsincluded
BuildingProducts Buildingproducts
Constructionmaterials
Chemicals
Tradingcompaniesanddistributors
Construction&Engineering Constructionandengineering
Energyequipmentandservices
Commercialservicesandsupplies
Food&Beverage Consumerstaples
Beverages
Foodproducts
Foodandstaplesretailing
Manufacturersanddistributorsoffood
Agriculturalproducts
Leisure Leisurefacilities
Hotels,resortsandcruiselines
Casinosandgaming
Moviesandentertainment
Media Media
Advertising
Publishing
Broadcasting
Mining&Resources Metals
Mining
Materials
Retail Textiles,apparelandluxurygoods
Specialtyretail
Multilineretail
Householddurables
Distributors
Foodretail
Restaurants
Transport&Distribution Transportationinfrastructure
Roadsandrail
Airfreightandlogistics
Marine
Commercialservicesandsupplies
Airlines
Utilities Multi-utilities
Gasutilities
Electricutilities
Electricalequipment
Independentpowerproducersandenergytraders
Thefullpeergroupsamplesareincludedonpages15-19.
Datausedinthissurveyhasbeen
sourcedfromtheS&PCapitalIQ
platform.

14
Debtors
DSO = x 365
Sales
Creditors
DPO = x 365
Cost of Sales
Calculationmethodology
Theworkingcapitalmetricsreferred
tointhisreporthavebeencalculated,
asfollows:
DaysSalesOutstanding(“DSO”)
DSOisthenumberofdays’worthof
salesrepresentedbytheoutstanding
debtorsattherelevantcalculationdate.
Thecalculationusedinthissurveyis:
AlowDSOmetricisdesirableand
indicatesthatittakesarelativelylow
numberofdaysforacompanyto
collectdebtors.
DaysPurchasesOutstanding(“DPO”)
DPOisthenumberofdays’worth
ofpurchasesrepresentedbythe
outstandingcreditorsattherelevant
calculationdate.Thecalculationused
inthissurveyis:
AlowDPOmetricindicatesthatittakes
fewerdaysforacompanytopayits
tradecreditors.AhighDPOisdesirable
fromacashflowandworkingcapital
managementperspective,butcanbe
anindicatoroftightliquidityandthe
causeofstrainedsupplierrelationships.
Inventory
DIO = x 365
Cost of Sales
AlowDIOmetricisdesirableand
indicatesarelativelyhighturnover
ofinventory.
AlowDWCmetricisfavourableasit
indicatesalowlevelofworkingcapital
relativetothesizeofthebusiness.
DaysWorkingCapitalOutstanding
(“DWC”)
DWCisarelativemeasureoftotal
workingcapitaltiedupinacompany
relativetosales.Thecalculationused
inthissurveyis:
DaysInventoryOutstanding(“DIO”)
DIOisthenumberofdays’worthof
purchasesrepresentedbytheinventory
balancesattherelevantcalculationdate.
Thecalculationusedinthissurveyis:
Debtors + Inventory
- Creditors
DWC = x 365
Sales
Sourcedata
Thispublicationcontainshighlevel
financialinformationsourcedfromthe
S&PCapitalIQdatabaseofthelatest
availablepublishedfinancialstatements
ofASXlistedentitiesforthe2016
financialyear.Theinformation
containedhereinisbasedonsources
webelievereliable,butwedonot
guaranteeitsaccuracy,anditshouldbe
understoodtobegeneralinformation
only.Theinformationisnotintendedto
betakenasadvicewithrespecttoany
specificorganisationorsituationand
cannotberelieduponassuch.
McGrathNicolacceptsnoresponsibility
forerrorsoromissionsinfinancial
informationunderpinningthis
publication,northelossofanyperson
arisingfromuseoforrelianceon
informationherein.Allreadersof
thispublicationmustmaketheirown
enquiriesorobtainprofessionaladvice
inrelationtoanyissueormatter
referredtointhispublication.
Limitations
McGrathNicolacknowledgesthatat
thelevelofdetailapplied,theanalysis
haslimitations,someofwhichare
notedbelow.Forthisreason,the
analysisfocusesonperformance
relativetothepriorperiod,rather
thaninabsolutetermsagainstpeers.
Dayssalesoutstanding
DebtorsincludeGST,whilesales
donot.Totheextentthatacompany
makesmoreorlessofitssalesin
Australia(oranotherjurisdiction
thatleviesaconsumptiontax),
resultswillvary.
Daysinventoryoutstanding
Totheextentthatacompanyhas
moreorlesslabourincludedinits
costofsales,resultswillvary.
Dayspurchasesoutstanding
CreditorsincludeGST,whilecost
ofsalesdonot.Totheextentthat
acompanyacquiresinventoryor
inputservicesinAustralia(oranother
jurisdictionthatleviesaconsumption
tax),resultswillvary.
Inaddition,totheextentthatthere
hasbeenanaccountingadjustment
thathasaffectedacompany’ssales,
purchases,debtors,inventoryor
creditors,thishasnotbeenisolated
intheanalysisandmaybereflected
asachangeinworkingcapital.
Basisofpreparation

Construction & Engineering
DSO DIO DPO DWC
Company name 2015 2016 Change 2015 2016 Change 2015 2016 Change 2015 2016 Change
Cardno Limited 88.0 59.8 (28.2) 53.1 37.2 (15.9) 43.8 39.7 (4.1) 96.3 57.5 (38.8)
Ausdrill Limited 69.6 71.8 2.2 153.7 129.4 (24.3) 31.4 32.9 1.5 160.5 141.4 (19.1)
Service Stream Limited 99.4 82.0 (17.4) 11.5 9.3 (2.2) 25.4 19.7 (5.7) 91.1 76.0 (15.1)
UGL Limited 44.9 38.1 (6.8) 47.3 52.4 5.1 41.7 52.8 11.1 50.2 37.7 (12.5)
Watpac Limited 53.5 42.3 (11.2) 8.7 7.0 (1.7) 6.5 4.9 (1.6) 55.5 44.3 (11.2)
Boart Longyear Limited 64.4 57.9 (6.5) 107.3 99.7 (7.6) 30.4 29.5 (0.9) 137.4 128.1 (9.3)
WorleyParsons Limited 92.0 88.9 (3.1) - - - 21.9 23.2 1.3 71.1 66.5 (4.6)
Downer EDI Limited 59.5 62.4 2.9 21.2 20.1 (1.1) 22.2 22.0 (0.2) 58.6 60.7 2.1
Decmil Group Limited 37.3 55.9 18.6 - - - 14.2 30.5 16.3 25.4 29.6 4.2
Seymour Whyte Limited 67.0 56.6 (10.4) - 0.4 0.4 45.4 16.6 (28.8) 34.2 43.6 9.4
RCR Tomlinson Limited 75.3 79.5 4.2 6.8 6.2 (0.6) 34.2 25.8 (8.4) 50.5 60.9 10.4
GR Engineering Services Limited 43.8 42.7 (1.1) 5.4 7.2 1.8 43.2 30.6 (12.6) 10.8 22.1 11.3
NRW Holdings Limited 37.6 46.2 8.6 24.9 46.7 21.8 34.1 51.2 17.1 32.7 44.2 11.5
MACA Limited 52.5 68.2 15.7 8.8 9.4 0.6 26.8 25.9 (0.9) 36.9 53.0 16.1
AJ Lucas Group Limited 67.6 74.9 7.3 36.3 52.8 16.5 27.5 32.6 5.1 75.8 92.8 17.0
Monadelphous Group Limited 89.0 105.5 16.5 - - - 14.2 10.1 (4.1) 76.3 96.4 20.1
Macmahon Holdings Limited 45.1 76.0 30.9 76.8 85.0 8.2 29.6 55.6 26.0 62.4 89.6 27.2
Peer group average 63.9 65.2 1.3 33.0 33.1 0.1 29.0 29.6 0.6 66.2 67.3 1.1
Building Products
DSO DIO DPO DWC
Fletcher Building Limited 64.6 55.3 (9.3) 83.9 79.8 (4.1) 50.7 50.9 0.2 89.6 77.0 (12.6)
GWA Group Limited 54.4 43.2 (11.2) 122.3 107.2 (15.1) 64.4 47.6 (16.8) 88.3 78.4 (9.9)
CSR Limited 50.7 50.8 0.1 85.3 83.4 (1.9) 53.9 54.3 0.4 72.0 70.1 (1.9)
Adelaide Brighton Limited 53.2 52.2 (1.0) 54.2 53.8 (0.4) 42.6 41.0 (1.6) 62.2 62.2 -
Boral Limited 56.0 52.8 (3.2) 64.6 69.4 4.8 77.0 75.8 (1.2) 47.2 48.5 1.3
DuluxGroup Limited 52.7 55.7 3.0 110.9 111.6 0.7 107.4 110.9 3.5 54.2 56.0 1.8
Coventry Group Limited 58.5 62.1 3.6 183.1 198.4 15.3 48.2 60.5 12.3 142.1 144.4 2.3
Reece Limited 53.6 55.7 2.1 95.4 97.6 2.2 77.5 76.3 (1.2) 65.6 69.9 4.3
James Hardie Industries plc 33.0 40.1 7.1 74.1 64.5 (9.6) 32.3 25.8 (6.5) 60.1 64.6 4.5
Brickworks Limited 52.0 51.8 (0.2) 130.8 139.4 8.6 62.7 57.4 (5.3) 100.3 108.4 8.1
Peer group average 52.9 52.0 (0.9) 100.5 100.5 - 61.7 60.1 (1.6) 78.2 78.0 (0.2)
15
Findings

Leisure
DSO DIO DPO DWC
Skydive the Beach Group Limited 27.4 15.5 (11.9) 32.4 17.0 (15.4) 34.2 12.4 (21.8) 26.5 18.0 (8.5)
Ardent Leisure Group 10.6 10.9 0.3 23.9 23.3 (0.6) 18.4 30.7 12.3 12.2 8.6 (3.6)
Elanor Investors Group 21.0 16.6 (4.4) 34.2 38.3 4.1 11.5 15.3 3.8 36.7 33.4 (3.3)
The Star Entertainment Group Limited 18.8 21.0 2.2 3.7 4.3 0.6 116.0 124.8 8.8 (19.5) (19.4) 0.1
Crown Resorts Limited 56.5 57.3 0.8 1.9 2.0 0.1 57.9 59.4 1.5 10.9 11.2 0.3
Mantra Group Limited 26.1 24.7 (1.4) 2.5 2.6 0.1 51.2 42.0 (9.2) (4.7) (0.6) 4.1
Sky City Entertainment Group Limited 6.6 13.4 6.8 8.1 7.2 (0.9) 19.4 22.1 2.7 1.9 7.5 5.6
Tatts Group Limited 8.3 13.9 5.6 0.7 0.4 (0.3) 96.6 84.1 (12.5) (57.2) (44.3) 12.9
Village Roadshow Limited 53.9 57.6 3.7 42.4 22.7 (19.7) 283.9 217.6 (66.3) (39.7) (23.1) 16.6
SeaLink Travel Group Limited 10.6 30.9 20.3 6.5 10.6 4.1 16.0 16.6 0.6 4.3 27.2 22.9
Peer group average 24.0 26.2 2.2 15.6 12.8 (2.8) 70.5 62.5 (8.0) (2.9) 1.9 4.8
Food & Beverage
DSO DIO DPO DWC
Australian Agricultural Company Limited 32.2 17.7 (14.5) 212.0 187.2 (24.8) 25.0 17.0 (8.0) 257.8 200.2 (57.6)
Freedom Foods Group Limited 101.0 97.8 (3.2) 153.0 140.8 (12.2) 93.3 113.5 20.2 139.1 117.0 (22.1)
Refresh Group Limited 33.4 28.9 (4.5) 119.2 111.0 (8.2) 32.0 32.3 0.3 72.7 64.7 (8.0)
Treasury Wine Estates Limited 92.2 88.7 (3.5) 193.4 220.9 27.5 48.7 70.7 22.0 189.8 184.5 (5.3)
Tassal Group Limited 17.2 24.7 7.5 159.4 85.6 (73.8) 131.2 85.1 (46.1) 29.8 25.0 (4.8)
Bega Cheese Limited 39.4 43.4 4.0 71.7 67.4 (4.3) 43.5 47.0 3.5 64.6 61.2 (3.4)
GrainCorp. Limited 35.8 37.8 2.0 62.0 60.7 (1.3) 16.8 19.7 2.9 73.3 71.3 (2.0)
Costa Group Holdings Limited 31.0 32.3 1.3 59.2 62.6 3.4 37.1 42.1 5.0 39.8 40.4 0.6
Blackmores Limited 100.6 82.1 (18.5) 93.4 194.2 100.8 127.7 170.2 42.5 87.3 90.9 3.6
Coca-Cola Amatil Limited 73.0 74.3 1.3 81.6 83.9 2.3 71.5 67.8 (3.7) 79.2 84.4 5.2
Elders Limited 77.2 84.3 7.1 39.9 44.0 4.1 71.7 77.8 6.1 51.6 57.2 5.6
Gage Roads Brewing Co Limited 31.7 42.4 10.7 63.5 51.4 (12.1) 151.1 152.4 1.3 (12.6) (6.5) 6.1
FFI Holdings Limited 44.1 45.7 1.6 85.6 95.4 9.8 60.1 59.5 (0.6) 57.2 64.3 7.1
Ridley Corporation Limited 39.9 44.2 4.3 35.9 38.5 2.6 69.8 64.0 (5.8) 8.9 20.9 12.0
Bellamy's Australia Limited 60.8 50.6 (10.2) 63.0 153.3 90.3 62.6 95.8 33.2 61.2 88.5 27.3
Huon Aquaculture Group Limited 37.1 36.6 (0.5) 47.2 29.5 (17.7) 227.8 113.1 (114.7) (45.8) (11.9) 33.9
Capilano Honey Limited 63.2 62.4 (0.8) 115.1 171.6 56.5 13.3 10.9 (2.4) 125.6 161.7 36.1
Warrnambool Cheese And Butter Factory
Company Holdings Limited
58.5 75.4 16.9 92.6 143.1 50.5 51.5 44.3 (7.2) 89.1 152.0 62.9
Peer group average 53.8 53.9 0.1 97.1 107.8 10.7 74.2 71.3 (2.9) 76.0 81.4 5.4
16
Findings

Media
DSO DIO DPO DWC
APN News & Media Limited 57.0 54.6 (2.4) 4.4 3.5 (0.9) 62.3 64.8 2.5 13.8 7.6 (6.2)
NZME. Limited 56.8 57.9 1.1 1.7 2.1 0.4 55.0 66.1 11.1 15.0 9.3 (5.7)
Sky Network Television Limited 25.3 24.4 (0.9) - - - 60.6 62.0 1.4 (4.5) (8.8) (4.3)
News Corporation 57.6 56.5 (1.1) 22.0 16.8 (5.2) 17.5 16.8 (0.7) 60.2 56.6 (3.6)
APN Outdoor Group Limited 85.3 76.2 (9.1) 3.7 4.1 0.4 40.4 12.1 (28.3) 76.7 74.5 (2.2)
REA Group Limited 51.9 52.9 1.0 - - - 29.0 30.2 1.2 45.6 46.3 0.7
oOh!media Limited 75.3 78.4 3.1 0.5 2.5 2.0 6.0 11.1 5.1 71.7 73.2 1.5
WPP AUNZ Limited 137.5 128.2 (9.3) 5.8 6.0 0.2 131.3 107.6 (23.7) 53.4 55.6 2.2
Prime Media Group Limited 70.4 73.3 2.9 - - - 7.0 6.8 (0.2) 65.6 68.4 2.8
Southern Cross Media Group Limited 66.9 73.6 6.7 - - - 29.7 51.0 21.3 61.7 64.7 3.0
Fairfax Media Limited 60.0 65.0 5.0 6.3 7.1 0.8 44.4 45.6 1.2 28.4 32.8 4.4
Seven West Media Limited 56.5 62.6 6.1 6.6 6.9 0.3 64.6 64.7 0.1 17.4 23.6 6.2
Nine Entertainment Co. Holdings Limited 74.3 81.4 7.1 - - - 64.4 49.3 (15.1) 17.8 38.0 20.2
Peer group average 67.3 68.1 0.8 3.9 3.8 (0.1) 47.1 45.2 (1.9) 40.2 41.7 1.5
Mining & Resources
DSO DIO DPO DWC
Whitehaven Coal Limited 44.8 21.3 (23.5) 78.9 41.6 (37.3) 41.2 34.6 (6.6) 65.1 24.8 (40.3)
Yancoal Australia Limited 82.1 66.3 (15.8) 41.7 29.9 (11.8) 103.7 114.6 10.9 39.4 6.6 (32.8)
Resolute Mining Limited 9.1 4.6 (4.5) 240.7 210.7 (30.0) 19.5 13.1 (6.4) 151.3 119.4 (31.9)
OceanaGold Corporation 20.4 25.2 4.8 107.1 126.7 19.6 79.9 150.6 70.7 34.4 12.7 (21.7)
OZ Minerals Limited 56.1 40.9 (15.2) 180.8 230.2 49.4 90.0 101.9 11.9 88.7 74.0 (14.7)
Mineral Resources Limited 39.1 26.7 (12.4) 52.3 64.5 12.2 101.1 119.3 18.2 19.9 5.9 (14.0)
Newcrest Mining Limited 17.4 15.1 (2.3) 82.1 77.3 (4.8) 43.4 52.4 9.0 47.0 34.6 (12.4)
Rio Tinto Limited 27.7 24.1 (3.6) 46.8 41.4 (5.4) 27.9 33.6 5.7 41.2 30.4 (10.8)
AngloGold Ashanti Limited 17.6 14.5 (3.1) 82.6 72.2 (10.4) 36.9 34.2 (2.7) 53.8 45.4 (8.4)
Fortescue Metals Group Limited 13.9 12.4 (1.5) 38.0 39.9 1.9 8.7 13.7 5.0 39.2 31.2 (8.0)
BlueScope Steel Limited 46.5 45.9 (0.6) 114.0 101.9 (12.1) 88.3 88.0 (0.3) 60.9 53.5 (7.4)
Iluka Resources Limited 46.2 46.3 0.1 328.5 315.2 (13.3) 20.4 21.5 1.1 243.4 236.7 (6.7)
Northern Star Resources Limited 6.2 4.6 (1.6) 50.2 42.7 (7.5) 31.9 29.2 (2.7) 19.2 13.4 (5.8)
ST Barbara Limited 3.9 2.6 (1.3) 57.5 70.2 12.7 45.3 47.5 2.2 11.3 13.8 2.5
Regis Resources Limited 13.4 20.1 6.7 34.1 31.7 (2.4) 13.1 15.4 2.3 28.3 30.9 2.6
BHP Billiton Limited 40.3 43.3 3.0 198.7 189.6 (9.1) 342.1 299.6 (42.5) 15.2 20.3 5.1
Alcoa Inc. 32.5 30.2 (2.3) 59.0 69.9 10.9 60.3 58.7 (1.6) 31.4 39.1 7.7
New Hope Corporation Limited 28.5 54.9 26.4 75.3 55.3 (20.0) 55.6 66.8 11.2 39.4 47.3 7.9
Sims Metal Management Limited 21.5 29.3 7.8 30.8 35.9 5.1 20.6 23.4 2.8 30.6 40.1 9.5
Sandfire Resources NL 6.5 15.0 8.5 76.3 77.0 0.7 92.1 78.8 (13.3) 2.3 14.5 12.2
Alacer Gold Corp. 18.4 15.0 (3.4) 162.1 213.5 51.4 68.9 71.0 2.1 56.9 74.3 17.4
Evolution Mining Limited 4.9 6.7 1.8 47.4 70.9 23.5 31.1 32.1 1.0 17.4 38.7 21.3
Peer group average 27.1 25.7 (1.4) 99.3 100.4 1.1 64.6 68.2 3.6 51.7 45.8 (5.9)
17
Findings

Retail
DSO DIO DPO DWC
Retail Food Group Limited 136.4 107.3 (29.1) 96.2 55.3 (40.9) 75.0 49.6 (25.4) 150.3 110.9 (39.4)
AMA Group Limited 44.2 31.5 (12.7) 66.9 50.4 (16.5) 63.4 93.4 30.0 45.8 13.3 (32.5)
Gazal Corporation Limited 66.7 54.8 (11.9) 191.9 151.8 (40.1) 128.7 108.5 (20.2) 103.8 81.4 (22.4)
Kathmandu Holdings Limited 0.1 0.1 - 262.5 218.8 (43.7) 33.0 28.7 (4.3) 88.4 71.2 (17.2)
GUD Holdings Limited 80.3 74.6 (5.7) 146.8 109.3 (37.5) 84.9 58.3 (26.6) 119.0 105.7 (13.3)
The PAS Group Limited 36.1 28.5 (7.6) 96.5 90.4 (6.1) 26.1 31.7 5.6 67.6 55.0 (12.6)
OrotonGroup Limited 11.7 9.5 (2.2) 265.2 205.7 (59.5) 77.5 45.2 (32.3) 85.3 73.4 (11.9)
Specialty Fashion Group Limited 4.1 2.8 (1.3) 99.1 88.2 (10.9) 19.4 32.9 13.5 37.1 27.4 (9.7)
Baby Bunting Group Limited 11.8 12.5 0.7 109.5 96.2 (13.3) 44.2 41.9 (2.3) 54.7 48.2 (6.5)
Nick Scali Limited 0.6 0.4 (0.2) 144.2 118.4 (25.8) 42.4 28.6 (13.8) 40.6 35.6 (5.0)
Lovisa Holdings Limited 2.3 1.1 (1.2) 177.9 137.5 (40.4) 55.4 39.3 (16.1) 30.4 26.7 (3.7)
Fantastic Holdings Limited 3.4 3.9 0.5 119.9 111.0 (8.9) 9.9 8.7 (1.2) 64.4 61.7 (2.7)
Woolworths Limited 3.6 2.7 (0.9) 41.6 39.0 (2.6) 43.0 41.2 (1.8) 2.6 1.1 (1.5)
Super Retail Group Limited 3.8 2.7 (1.1) 144.9 133.5 (11.4) 55.9 44.5 (11.4) 54.4 53.1 (1.3)
Metcash Limited 27.7 26.5 (1.2) 21.3 19.8 (1.5) 42.4 39.9 (2.5) 8.4 8.0 (0.4)
Collins Foods Limited 1.2 2.8 1.6 6.2 5.9 (0.3) 58.0 62.0 4.0 (23.5) (23.7) (0.2)
Breville Group Limited 60.9 56.1 (4.8) 111.1 102.0 (9.1) 87.4 70.9 (16.5) 76.9 76.9 -
Wesfarmers Limited 8.6 9.0 0.4 46.2 49.7 3.5 48.4 51.6 3.2 7.0 7.7 0.7
JB Hi-Fi Limited 8.1 9.1 1.0 61.2 64.6 3.4 32.4 35.7 3.3 30.6 31.6 1.0
The Reject Shop Limited - - - 86.5 79.4 (7.1) 31.0 22.2 (8.8) 31.0 32.4 1.4
Billabong International Limited 57.5 57.3 (0.2) 138.6 125.2 (13.4) 99.1 81.9 (17.2) 76.0 78.5 2.5
AP Eagers Limited 14.4 15.9 1.5 73.6 73.3 (0.3) 11.5 9.4 (2.1) 65.0 67.8 2.8
Automotive Holdings Group Limited 22.2 21.6 (0.6) 68.0 72.1 4.1 9.5 8.4 (1.1) 66.0 69.1 3.1
Vita Group Limited 17.2 17.7 0.5 15.4 12.9 (2.5) 32.3 24.9 (7.4) 6.4 10.0 3.6
Premier Investments Limited 5.5 5.7 0.2 116.3 119.0 2.7 39.7 30.5 (9.2) 33.5 37.4 3.9
Myer Holdings Limited 1.8 3.8 2.0 93.2 94.7 1.5 46.8 45.0 (1.8) 26.7 30.8 4.1
ARB Corporation Limited 46.7 45.4 (1.3) 189.8 198.5 8.7 55.0 48.0 (7.0) 107.9 112.8 4.9
Beacon Lighting Group Limited 14.0 17.1 3.1 257.3 273.7 16.4 33.9 35.1 1.2 91.3 100.8 9.5
Adairs Limited 2.9 3.0 0.1 105.8 97.0 (8.8) 61.9 26.6 (35.3) 19.7 30.5 10.8
One All International Limited 68.6 49.0 (19.6) 115.2 144.8 29.6 88.2 61.9 (26.3) 84.7 96.9 12.2
Harvey Norman Holdings Limited 34.8 31.2 (3.6) 96.6 93.5 (3.1) 210.8 185.4 (25.4) (44.7) (31.8) 12.9
McPherson's Limited 58.6 53.1 (5.5) 101.2 121.6 20.4 65.7 51.6 (14.1) 79.8 93.2 13.4
Domino's Pizza Enterprises Limited 25.1 33.4 8.3 9.7 10.7 1.0 50.8 44.9 (5.9) (3.5) 10.2 13.7
Godfreys Group Limited 9.5 11.5 2.0 111.1 155.6 44.5 74.6 75.9 1.3 26.0 48.0 22.0
Bapcor Limited 31.5 44.6 13.1 128.2 155.5 27.3 92.6 91.4 (1.2) 52.3 80.4 28.1
Peer group average 26.3 24.2 (2.1) 111.9 105.0 (6.9) 58.0 50.2 (7.8) 50.3 49.5 (0.8)
18
Findings

Utilities
DSO DIO DPO DWC
APA Group 59.9 45.9 (14.0) 141.2 70.1 (71.1) 197.3 77.0 (120.3) 57.9 45.5 (12.4)
AusNet Services Limited 45.4 40.1 (5.3) 53.8 79.4 25.6 76.0 141.4 65.4 42.3 32.4 (9.9)
Energy World Corporation Limited 57.7 54.1 (3.6) 8.9 4.1 (4.8) 26.2 30.7 4.5 50.7 43.2 (7.5)
Contact Energy Limited 35.0 33.6 (1.4) 12.2 12.9 0.7 40.9 49.8 8.9 12.6 5.7 (6.9)
Origin Energy Limited 66.4 61.3 (5.1) 9.2 9.3 0.1 78.1 77.1 (1.0) 11.2 6.2 (5.0)
AGL Energy Limited 64.7 64.7 - 18.4 18.6 0.2 56.0 61.0 5.0 37.1 33.8 (3.3)
Pacific Energy Limited 43.8 46.4 2.6 81.1 72.0 (9.1) 146.6 188.0 41.4 39.0 37.8 (1.2)
Spark Infrastructure Group 15.1 14.9 (0.2) - - - - - - 15.1 14.9 (0.2)
Genesis Energy Limited 35.5 35.0 (0.5) 19.9 20.9 1.0 - - - 49.4 49.4 -
Meridian Energy Limited 29.0 29.8 0.8 - - - - - - 29.0 29.8 0.8
ERM Power Limited 34.4 43.7 9.3 6.0 3.0 (3.0) 34.6 37.8 3.2 6.9 9.9 3.0
Infigen Energy 43.2 33.7 (9.5) 133.4 201.2 67.8 86.4 56.4 (30.0) 55.4 65.0 9.6
DUET Group 44.3 56.0 11.7 35.9 45.4 9.5 17.8 17.2 (0.6) 47.7 62.9 15.2
Peer group average 44.2 43.0 (1.2) 40.0 41.3 1.3 58.5 56.6 (1.9) 34.9 33.6 (1.3)
Transport & Distribution
DSO DIO DPO DWC
Royal Wolf Holdings Limited 45.9 40.2 (5.7) 88.8 69.4 (19.4) 27.3 48.9 21.6 75.3 51.9 (23.4)
MMA Offshore Limited 94.7 65.1 (29.6) 2.5 3.2 0.7 14.6 7.0 (7.6) 84.0 61.2 (22.8)
MaxiTRANS Industries Limited 49.2 44.3 (4.9) 97.7 94.6 (3.1) 57.9 62.3 4.4 73.4 63.8 (9.6)
K&S Corporation Limited 45.4 35.8 (9.6) 3.7 4.1 0.4 65.9 59.8 (6.1) 10.7 5.0 (5.7)
Lindsay Australia Limited 53.4 56.5 3.1 21.7 18.9 (2.8) 37.7 45.6 7.9 40.2 34.8 (5.4)
CTI Logistics Limited 58.2 49.3 (8.9) 1.3 0.4 (0.9) 40.0 30.8 (9.2) 26.8 23.7 (3.1)
Aurizon Holdings Limited 53.1 54.3 1.2 31.3 28.4 (2.9) 56.4 51.8 (4.6) 38.2 41.0 2.8
Qube Holdings Limited 53.1 54.3 1.2 0.7 0.9 0.2 38.0 34.8 (3.2) 25.1 28.1 3.0
Brambles Limited 69.0 75.0 6.0 8.2 8.4 0.2 49.8 38.7 (11.1) 41.7 54.9 13.2
Peer group average 58.0 52.8 (5.2) 28.4 25.4 (3.0) 43.1 42.2 (0.9) 46.2 40.5 (5.7)
19
Findings

Adelaide
+61 8 8468 3700
Level 26, 91 King William Street
Adelaide SA 5000
Melbourne
+61 3 9038 3100
Level 6, 171 Collins Street
Melbourne VIC 3000
Brisbane
+61 7 3333 9800
Level 7, 175 Eagle Street
Brisbane QLD 4000
Perth
+61 8 6363 7600
Level 17, 37 St Georges Terrace
Perth WA 6000
Canberra
+61 2 6222 1400
Level 9, 60 Marcus Clarke Street
Canberra ACT 2601
Sydney
+61 2 9338 2600
Level 12, 20 Martin Place
Sydney NSW 2000
Auckland
+64 9 336 4655
Level 17, 34 Shortland Street
Auckland 1010 New Zealand
Ouroffices

Working-Capital-Report-2016

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