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Prepared by the McGrathNicol Cash and Working Capital Centre of Excellence
11
WelcomeManagement teams shortened the average working capital cycle of the sampled companies in 2015. The equivalent of $1.2 billion in cash was released from the working capital cycles. The spread of results remains large with the gap between the “best” and “worst” performers significant, meaning a material competitive advantage can be gained by implementing best practice.
Welcome to the 2015 McGrathNicol Working Capital Report, prepared by our Cash and Working Capital Centre of Excellence.
This report profiles the working capital performance of a sample of 111 ASX listed companies across the Building Products, Construction & Engineering, Food & Beverage, Media & Leisure, Mining & Resources, Retail, Transport & Distribution and Utilities sectors.
The combined market capitalisation of the companies included is $494.6 billion, representing 83.2% of the total for the selected sectors. The information is based on the most recent full-year results for 2015, compared to 2014 results.
Overall, the amount of cash tied up in working capital fell in 2015 compared to 2014 due to reductions in average debtor collection and inventory cycles in the majority of the profiled sectors. However, consistent with 2014, there were varying results across companies within sectors.
The most significant improvements were achieved by management teams who implemented focused working capital improvement programs.
Across sectors the results were also mixed, with three of the eight sectors we analysed showing an increase in the cash invested in working capital. Our international research on comparable companies suggests that there is an opportunity for improvement in some sectors within Australia such as Retail, but in other sectors such as Construction & Engineering the sample compared very well. The following pages include our analysis for each sector.
Information about our Cash and Working Capital Centre of Excellence, including contact details, is provided at the end of this report.
0
20
40
60
80
100
60.857.8
34.1
80.3
26.6
40.1
50.5
Construction & Engineering
RetailMedia & Leisure
Building Products
UtilitiesTransport & Distribution
Full sample
Day
s
DWC at 30 June (or latest available)
2014 2015
SUMMARY
Mining & Resources
Food & Beverage
43.0
55.3
Average DWC by sector
Summary sample
Days 2014 2015 Change
DSO 46.8 45.7 (1.1)
DIO 67.3 64.8 (2.5)
DPO 58.3 55.7 (2.6)
DWC 51.4 50.5 (0.9)
DSO = Days sales outstanding (debtors) DIO = Days inventory outstanding (inventory held) DPO = Days purchases outstanding (creditors) DWC = Days working capital (net working capital)
For details of the basis of preparation and calculations, see pages 12, 13 & 14.
2Cash and Working Capital
Centre of Excellence
Average Days Working Capital (DWC) in 2015 was 50.5 days, representing a 0.9 day reduction from 2014, “releasing” over $1.2 billion in cash from the combined working capital cycles of our sampled companies.
As shown in the table below, the improvement was driven by a 2.5 day reduction in inventory days (DIO) and a 1.1 day reduction in debtor days (DSO). This means that, on average, management teams were able to reduce the cash tied up in inventory and generate comparatively more cash through better billing and collections performance. The additional cash was used in part to pay creditors more promptly than in 2014 (reducing creditor days, or DPO, by 2.6 days).
The biggest improvements were achieved in the Building Products, Transport & Distribution and Retail sectors. The Construction & Engineering, Media & Leisure and Food & Beverage sectors showed an increase in average DWC.
Whilst there was an overall reduction in net working capital, underlying results were mixed with 49% of the profiled companies reporting an increase in DWC highlighting that achieving an improvement in working capital is not only desirable to “keep up” with competitors, it presents an opportunity for material competitive advantage over much of the market.
Within some sectors this opportunity was even more marked with the gap between the “best” and “worst” often 100+ days (Construction & Engineering, Food & Beverage, Media & Leisure). In other sectors, Retail for instance, the improvements of a minority of companies moved the average to a position of improvement despite the majority of the sector showing an increase in cash tied up in working capital.
The following pages provide a break down by sector and highlight the stronger performers relative to the prior year.
Overall improvement driven by lower inventory and debtor days. Building Products, Transport & Distribution and Retail sectors saw the largest improvements (lower DWC) while Construction & Engineering, Media & Leisure and Food & Beverage sectors showed an increase in average DWC.
Summary
0
20
40
60
120
80
100
140
88.3
47.2
100.3
60.1
80.3
65.6
Peer group average
GWA Group Limited
Brickworks Limited
Boral Limited
James Hardie Industries plc
Reece Australia Limited
Day
s
DWC at 30 June (or latest available)
2014 2015
BUILDING PRODUCTSTop 5 DWC improvements - Building Products
Best & Worst
Days Best Worst Spread
DSO 33.0 64.6 31.6
DIO 52.8 183.1 130.3
DPO 77.5 32.2 (45.3)
DWC 47.2 128.4 81.2
Building Products
Days 2014 2015 Change
DSO 57.8 53.2 (4.6)
DIO 106.1 101.0 (5.1)
DPO 60.8 59.7 (1.1)
DWC 86.7 80.3 (6.4)
GWA Group Limited
Days 2014 2015 Change
DSO 75.9 54.4 (21.5)
DIO 174.8 122.3 (52.5)
DPO 88.4 64.4 (24.0)
DWC 126.9 88.3 (38.6)
3Cash and Working Capital Centre of Excellence
The Building Products sector benefited from an increase in residential construction activity during 2015, with new dwelling starts up by 16%, driving revenue growth of 4.8% across the sampled companies. Margins also improved.
Businesses in this sector tend to require a high investment in working capital (mainly inventory) to manage the demands of the large construction companies and developers, and for those with a retail focus, to ensure immediate availability of inventory for a broad trade and DIY customer base.
Of the sectors included in our research, Building Products had the highest average DWC in 2015 at 80.3 days. However, it also had the largest improvement – a 6.4 day reduction from 86.7 days in 2014 – driven by a 4.6 day reduction in DSO and a 5.1 day reduction in DIO. While average DIO reduced, it still stood at 101 days and 62% of the sample saw an increase. Inventory management
is the differentiator in the sector – only Retail has a higher investment in inventory. The increased cash flow associated with the reduced DSO and DIO also allowed the sector (on average) to pay its suppliers slightly more quickly (DPO reduced by 1.1 days).
As a part of rationalisation strategies, a number of our sampled companies reported a reduction in their product lines and a more strategic approach to particular parts of the market – for example, GWA Group focused on bathrooms and kitchens whilst Brickworks focused on premium brick and masonry products for the commercial and residential markets. GWA Group, the biggest improver in the sector, reduced its DWC by 38.6 days. It exited its manufacturing operations and other non-core businesses – removing a number of complexities from its supply chain and reducing DIO by 52.5 days in the process.
The most material sector improvement, driven by lower debtor and inventory days.
“A strong cash flow performance was achieved in FY15 through the focus on working capital management. Plans have been successfully implemented to reduce the higher stock levels from FY14 and through improved debtor collections and claims management processes.”
GWA Group Limited Board of Directors FY15 Annual Report
Building Products
0
20
40
60
80
25.5
32.7
50.1
36.9
61.3 60.8
Decmil Group Limited
NRW Holdings Limited
UGL Limited MACA Limited
MacMahon Holdings Limited
Peer group average
Day
s
DWC at 30 June (or latest available)
2014 2015
CONSTRUCTION
Top 5 DWC improvements - Construction & Engineering
Best & Worst
Days Best Worst Spread
DSO 37.5 110.8 73.3
DIO - 142.7 142.7
DPO 150.6 6.5 (144.1)
DWC 25.4 150.1 124.7
Construction & Engineering
Days 2014 2015 Change
DSO 64.7 64.4 (0.3)
DIO 35.7 32.0 (3.7)
DPO 42.5 36.2 (6.3)
DWC 59.8 60.8 1.0
UGL Limited
Days 2014 2015 Change
DSO 49.3 44.9 (4.4)
DIO 70.7 47.3 (23.4)
DPO 46.8 41.7 (5.1)
DWC 71.0 50.1 (20.9)
4Cash and Working Capital
Centre of Excellence
The relatively tough trading conditions for companies in the Construction & Engineering sector continued during 2015. Low commodity prices impacted demand for mining, civil and consulting services, however some operators were able to maintain activity levels through work on private and Government-funded telecommunications, defence and infrastructure projects.
The sampled companies paid their suppliers in nearly half the time they collected from their debtors. This metric means billing and collections processes must be very efficient or market participants can come under funding pressure. To this latter point, the sampled companies had the highest average gearing ratio (debt to EBITDA) (4.1 times) of the sectors covered in our research.
In 2015 DWC increased by 1 day to 60.8 days, driven by a 6.3 day decrease in DPO. This in part reflects the prior year amendments to the Securities of Payments Act in various states and mandatory deadlines for principals to make progress payments to
contractors. The movement in DPO was partially offset by 0.3 day and 3.7 day reductions in DSO and DIO, respectively, although the DIO reductions were not all cash releases.
While there was an overall increase in DWC, we note that nine of the 19 sampled companies actually reduced DWC, highlighting the need for management teams to continually assess and adjust working capital processes so as not to lose ground to competitors.
Our international research suggests that the Australian sample compares well to comparable companies in the USA, Asia and UK markets. Strong improvers in the sector included Decmil, NRW and UGL. The latter released approximately $115 million cash in 2015 by reducing its DWC by 20.9 days. This allowed it to pay down its long-term debt, significantly reducing its gearing ratio. A number of companies in the sample also took large write-downs to slow-moving inventories during 2015, and five companies divested non-core assets in a bid to free up cash.
“The business maintains a significant focus on working capital management, achieved by working with customers to ensure payment terms are met and disputed claims are resolved. Focus also remains on commercial terms so new contracts provide accelerated billing milestones and payments in advance to the extent possible.”
Kathryn Spargo Chairman UGL Limited FY15 Annual Report
Improvements in debtor and inventory management have been more than offset by a continued tightening of creditor terms.
Construction & Engineering
0
20
40
60
80
100
71.9
61.257.2
7.0 2.5
55.3
Blackmores Limited
Bellamy’s Australia Limited
FFI Holdings Limited
Wesfarmers Limited
Woolworths Limited
Peer group average
Day
s
DWC at 30 June (or latest available)
2014 2015
FOOD BEVBest & Worst
Days Best Worst Spread
DSO 3.5 107.8 104.3
DIO 22.4 153.0 130.6
DPO 156.2 32.0 (124.2)
DWC (12.6) 145.9 158.5
Food & Beverage
Days 2014 2015 Change
DSO 45.8 49.5 3.7
DIO 82.4 81.1 (1.3)
DPO 71.2 72.2 1.0
DWC 51.1 55.3 4.2
Blackmores Limited
Days 2014 2015 Change
DSO 74.3 82.9 8.6
DIO 122.6 93.4 (29.2)
DPO 82.0 127.7 45.7
DWC 87.8 71.9 (15.9)
Top 5 DWC improvements - Food & Beverage
5Cash and Working Capital Centre of Excellence
The operating performance of the sampled Food & Beverage companies was reasonably flat in 2015, with only a marginal uplift in both revenues and earnings from 2014 (1.8% and 0.7%, respectively).
In terms of working capital performance, whilst 55% of the sampled companies improved their metrics (lowered DWC) in 2015, average DWC across the sample increased by 4.2 days from 51.1 days in 2014 to 55.3 days in 2015. The movement was driven by DSO, which increased by 3.7 days, although this was partially offset by a 1.3 day fall in DIO. Overall the sector showed a 1 day increase in DPO, although results were very mixed with some participants showing significant reductions in DPO. It was these reductions that contributed to the overall DWC increase.
The Food & Beverage sector includes a mix of processing, wholesale and retail operators, and as a result, there is typically a wide spread of working capital metrics across the sample.
Whilst the major retailers consistently achieve low DWC (Wesfarmers: 7 days, Woolworths: 2.5 days in 2015), some down-stream businesses have DWC well in excess of 100 days as they manage a range of logistical functions, including manufacturing, packaging and distribution.
The two biggest improvements in the sector in 2015 were achieved by Blackmores and Bellamy’s Australia. Whilst both saw an increase in DSO, both materially reduced DIO and moved to longer payment cycles. At the other end of the sample, Freedom Foods recorded a 23 day increase in DWC in 2015 due to a shift in its DIO metrics (24.7 day increase) as it changed the sales (and related inventory) mix for its beverages business and introduced new products.
“Operating cash flow improved 90% on the prior year as a result of a strong trading performance, continued focus on working capital improvements and an improved treasury capability.”
Marcus C Blackmore AM Director Blackmores Limited FY15 Annual Report
An increase in cash tied up, driven by an increase in debtor days.
Food & Beverage
0
20
40
60
80
(20)
(40)
100
(60)
(39.1)
65.6
(4.5)
28.9
58.8
34.1
Peer group average
Village Roadshow Limited
Sky Network Television
Limited
Prime Media Group Limited
Fairfax Media Limited
News Corporation
Day
s
DWC at 30 June (or latest available)
2014 2015
Top 5 DWC improvements - Media & LeisureBest & Worst
Days Best Worst Spread
DSO 14.8 137.5 122.7
DIO - 42.4 42.4
DPO 283.9 6.0 (277.9)
DWC (39.1) 77.9 117.0
Media & Leisure
Days 2014 2015 Change
DSO 63.7 63.1 (0.6)
DIO 7.3 8.5 1.2
DPO 65.6 66.2 0.6
DWC 32.9 34.1 1.2
Prime Media Group Limited
Days 2014 2015 Change
DSO 78.5 70.4 (8.1)
DIO - - -
DPO 2.2 7.0 4.8
DWC 76.9 65.6 (11.3)
6Cash and Working Capital
Centre of Excellence
The sampled Media & Leisure companies increased average revenues in 2015 on the back of expanding on-demand, digital and online activities. However, the competitive environment and higher levels of investment required to establish those newer income streams meant that average earnings fell (1.5%) compared to 2014. Media companies also tend to use more operating leverage than other sectors, meaning that without rigorous focus from senior management, cash flow can fluctuate significantly in periods of revenue volatility.
The level of change in the industry was further highlighted by the fact that 11 of our 14 sampled companies undertook refinancing and/or restructuring activities during 2015.
In terms of working capital performance, average DWC increased by 1.2 days to 34.1 days in 2015, driven by a 1.2 day increase in DIO, noting that average
DIO was still only 8.5 days. There were some companies that achieved material reductions in DWC, most notably Prime Media Group (11.3 days), Sky Network Television (10.2 days) and Village Roadshow (17.3 days). For the latter two, the chart below shows that they had negative working capital and DWC in 2015, meaning that working capital provided a source of funding for these companies.
At the other end of the sample, Nine Entertainment and STW Communications Group both recorded material increases in DWC (31.9 days and 14.8 days, respectively). Whilst both companies reduced DSO this was more than offset by large reductions in DPO, with STW Communications citing the timing of key media payments as the main driver for its shorter average payment cycle and reduced operating cash flows.
“The increase in operating cash flows was primarily due to improved management of working capital and reductions in income tax and borrowing costs.”
P J Macourt Director Prime Media Group Limited FY15 Annual Report
Slight increase in DWC as sector participants continue to focus on changing business models and related newer income streams.
Media & Leisure
0
20
40
60
80
100
72.7
39.2 41.2
51.1
39.143.0
Newcrest Mining Limited
Fortescue Metals Group
Limited
Rio Tinto Limited
AngloGold Ashanti Limited
New Hope Corporation
Limited
Peer group average
Day
s
DWC at 30 June (or latest available)
2014 2015
MINING
Top 5 DWC improvements - Mining & ResourcesBest & Worst
Days Best Worst Spread
DSO 6.5 82.1 75.6
DIO 31.3 200.4 169.1
DPO 226.7 8.7 (218.0)
DWC 1.7 72.7 71.0
Mining & Resources
Days 2014 2015 Change
DSO 30.1 31.3 1.2
DIO 77.1 70.5 (6.6)
DPO 61.2 56.5 (4.7)
DWC 43.1 43.0 (0.1)
Fortescue Metals Group Limited
Days 2014 2015 Change
DSO 18.2 13.9 (4.3)
DIO 76.5 38.0 (38.5)
DPO 20.7 8.7 (12.0)
DWC 51.4 39.2 (12.2)
7Cash and Working Capital Centre of Excellence
Reduced inventory levels resulted in a marginal DWC improvement.
“Strong cash flows generated by operations, a disciplined approach to capital management and working capital efficiencies allowed Fortescue to continue debt repayments in FY15.”
Fortescue Metals Group Limited Operating and Financial Review FY15 Annual Report
The performance of companies in the Mining & Resources sector has been widely reported over the past year, with falling commodity prices and a variable demand from China prompting companies to increase their focus on cost reduction initiatives, productivity efficiencies and better working capital management.
The average DWC of the sampled companies reduced 0.1 days to 43 days in 2015, driven by a 6.6 day reduction in DIO, partially offset by a 4.7 day reduction in DPO. Whilst average DPO fell in 2015 (sampled companies paid their suppliers more quickly), companies in the sector typically have collection cycles that are much shorter than their payment cycles.
Nine of the 12 sampled companies reduced DIO, the majority of which included commentary in their annual
reports and statements around a focus on reducing inventories to levels that better reflected the lower demand for commodities.
Newcrest Mining, Fortescue Metals and Rio Tinto recorded the largest improvements. The latter reduced its DWC by 11.1 days to 41.2 days on the back of significant reductions in both DSO and DIO. This contributed to net cash from operating activities of US$14.3 billion and a “release” of US$1.5 billion from its working capital during the period. Similarly, Fortescue Metals reported strong operating cash flows through a disciplined approach to capital management and working capital efficiencies.
Mining & Resources
Best & Worst
Days Best Worst Spread
DSO - 65.3 65.3
DIO 54.2 265.2 211.0
DPO 163.4 9.5 (153.9)
DWC 25.6 107.9 82.3
Retail
Days 2014 2015 Change
DSO 24.1 22.0 (2.1)
DIO 129.6 130.5 0.9
DPO 53.3 53.7 0.4
DWC 60.3 57.8 (2.5)
Pacific Brands Limited
Days 2014 2015 Change
DSO 78.6 41.4 (37.2)
DIO 272.7 119.4 (153.3)
DPO 108.6 80.2 (28.4)
DWC 160.7 61.2 (99.5)
Top 5 DWC improvements - Retail
0
20
40
60
120
80
100
140
160
180
61.2
25.6 25.8
47.1
60.0 57.8
Pacific Brands Limited
SurfStitch Group Limited
Godfreys Group Limited
AMA Group Limited
The PAS Group Limited
Peer group average
Day
s
DWC at 30 June (or latest available)
2014 2015
8Cash and Working Capital
Centre of Excellence
The low interest rate environment helped underpin (seasonally adjusted) retail growth of 4.7% in 2015, outstripping overall GDP growth of 2.2%. Online sales also grew strongly at 10.5%.
The average DWC for the sampled companies decreased by 2.5 days in 2015 compared to last year (57.8 days: 2015, 60.3 days: 2014), driven by a 2.1 day reduction in DSO.
Inventory is usually the most significant working capital item on a retailer’s balance sheet so its management is a key success factor in the sector. Whilst there was only a small movement in average DIO (0.9 day increase), it became a key point of differentiation in 2015 with 58% of our sample experiencing deteriorating DIO metrics and 42% achieving improvement. In a number of cases, this was directly tied to broader business strategy – for instance, Specialty Fashion Group discounted excess inventory following the acquisition of Rivers driving down DIO (by 31.3 days in 2015), whilst
OrotonGroup scaled back its inventory discounting measures as part of a “brand elevation strategy” which in turn increased inventory holdings (by 37% year on year) and DIO (by 50.3 days in 2015).
The majority of sampled companies were involved in acquisition / divestment or other restructuring activities in FY15 as they continued to rationalise their business models. This had a clear impact on working capital metrics.
Our international research sample suggests average DWC is higher in Australia than listed operators in USA (2 times) and UK (3 times), driven by DIO, suggesting there remains room for improvement in sourcing models.
Pacific Brands, SurfStitch Group and Godfreys Group recorded the largest improvement in the sector. Pacific Brand’s divestment of Workwear and Brand Collective coupled with a focus on supply chain and inventory management resulted in a 99.5 day fall in DWC to 61.2 days in 2015.
“Operationally, we have achieved significant reductions in our inventory levels despite upward pressure from currency depreciation and retail growth. Improvements in inventory management were a key priority in FY15.”
David Bortolussi CEO Pacific Brands Limited FY15 Annual Report
Lower DSO drove a reduction in DWC, whilst M&A activity also impacted the metrics.
Retail
Best & Worst
Days Best Worst Spread
DSO 35.7 91.9 56.2
DIO 1.1 97.7 96.6
DPO 97.2 14.6 (82.6)
DWC 10.7 81.2 70.5
Transport & Distribution
Days 2014 2015 Change
DSO 61.6 56.1 (5.5)
DIO 28.7 22.6 (6.1)
DPO 49.2 46.6 (2.6)
DWC 45.6 40.1 (5.5)
Brambles Limited
Days 2014 2015 Change
DSO 73.7 68.7 (5.0)
DIO 6.7 8.1 1.4
DPO 48.2 49.5 1.3
DWC 46.5 41.6 (4.9)
0
20
40
60
80
100
120
81.2
61.0
38.241.6
11.3
40.1
Peer group average
MMA Offshore Limited
Steamships Trading Company
Limited
Aurizon Holdings Limited
Brambles Limited
McAleese Limited
Day
s
DWC at 30 June (or latest available)
2014 2015
TRANSPORT - headings
Top 5 DWC improvements - Transport & Distribution
9Cash and Working Capital Centre of Excellence
Working capital reduced, driven by lower debtor and inventory days.
“Improved asset control practices contributed to reduced replacement capital expenditure relative to sales growth, and working capital efficiencies also contributed positively to cash flow.”
Brambles Limited Operating and Financial Review FY15 Annual Report
Whilst revenues for our sampled companies increased during 2015, they did so at a declining rate (1.5% compared to 4.2% in 2014). As a result, we saw a shift in focus to cost savings to boost profitability, and on working capital improvements to increase cash flow.
Average DWC across our sample decreased by 5.5 days (12%) from 45.6 days in 2014 to 40.1 days in 2015. The reduction was driven by improvements in DSO (5.5 days) and DIO (6.1 days), suggesting an increased focus on achieving billing, collection and supply chain efficiencies. In turn, this allowed the sampled companies (on average) to pay their suppliers more quickly, with DPO falling by 2.6 days.
At a more macro level, Transport & Distribution is a sector where most operators require diligent focus on managing billing and collections processes to minimise slippage in
debtor collection timeframes because, on average, customer payment terms are longer than the terms offered by their suppliers. This can be a tough industry with critical and usually inflexible suppliers (fuel, contract labour and warehousing) on one hand, and clients with high levels of bargaining power (major retail, primary production and mining customers) on the other.
The most material improvements were made by Aurizon Holdings, Steamships Trading Company and MMA Offshore, the latter achieving a reduction in DWC from 110.8 days in 2014 to 81.2 days in 2015. McAleese also experienced one of the larger reductions in DSO (10.4 days) although this was driven by an impairment provision raised against debtor amounts following a client entering Administration.
Transport & Distribution
0
30
40
50
10
20
38.9 39.0
6.9
11.6
18.9
Peer group average
Pacific Energy Limited
Energy Developments
Limited
ERM Power Limited
Origin Energy Limited
AusNet Services
Day
s
DWC at 30 June (or latest available)
2014 2015
26.6
UTILITIES
Top 5 DWC improvements - UtilitiesBest & Worst
Days Best Worst Spread
DSO 15.1 68.4 53.3
DIO - 81.1 81.1
DPO 246.1 - (246.1)
DWC 6.9 45.1 38.2
Utilities
Days 2014 2015 Change
DSO 44.0 42.8 (1.2)
DIO 32.4 28.1 (4.3)
DPO 81.4 70.7 (10.7)
DWC 26.7 26.6 (0.1)
Pacific Energy Limited
Days 2014 2015 Change
DSO 50.1 43.8 (6.3)
DIO 120.7 81.1 (39.6)
DPO 173.9 146.6 (27.3)
DWC 47.2 39.0 (8.2)
10Cash and Working Capital
Centre of Excellence
After a significant improvement in 2014, average DWC for the sector was stable in 2015.
“The company’s working capital position remains strong…trade receivables have decreased compared to the prior period, and less than 2% of the Group’s customers are in arrears.”
James D Cullen CEO / Managing Director Pacific Energy Limited FY15 Annual Report
Key themes for the Utilities sector in 2015 included the continued high levels of competition in retail markets, reduced overall demand for gas and electricity and falling spot prices for electricity wholesalers. As a result, a number of the sampled companies reported a focus on operating efficiencies and cost-reduction initiatives to preserve earnings.
Over recent years, the sector has also been impacted by regulatory changes and ongoing uncertainty around longer-term domestic energy policy, including such items as a carbon tax policy.
From a working capital perspective, after a significant reduction in DWC in 2014 (4.1 days), the average DWC of the sampled companies reduced by only 0.1 days to 26.6 days in 2015. This was driven by reductions in DSO and DIO (1.2 days and 4.3 days, respectively), which allowed companies to pay their
suppliers more quickly (as reflected by the 10.7 day reduction in DPO).
Strong improvers in the sector included Energy Developments, Pacific Energy, ERM Power and Origin Energy. Energy Developments reduced its DSO by 8.3 days to 45.3 days in 2015, which drove an 8.7 day improvement in DWC and contributed to a net operating cash flow of $148.4 million. For the Ethane Pipeline Income Fund, the material deterioration in DWC (from 9.6 days in 2014 to 31.4 days in 2015) was driven by a 21.6 day increase in DSO although this was skewed by the timing of receipts from its sole customer. As previously reported, companies operating on the production side of the industry have a greater dependence on one or a few customers, which has a significant impact on working capital if trading terms are not closely managed.
Utilities
11Cash and Working Capital Centre of Excellence
Authors Jason Ireland Jason Preston Sean Wiles Sijmon van Loon
Our Cash and Working Capital Centre of Excellence is focused on increasing cash flow by implementing practical and effective procedures to forecast, track, save and generate cash. We help businesses to improve cash flow and give them the tools to sustain improvements.
Our Centre of Excellence program for CFO’s and finance staff provides training and advice on best practice cash and working capital management.
If you are interested in participating, or having a staff member attend a Centre of Excellence program, please contact Jason Ireland, Jason Preston or Sean Wiles.
State contacts
Sydney
Jason Ireland+61 2 9338 [email protected]
Jason Preston+61 2 9338 [email protected]
Sean Wiles+61 2 9248 [email protected]
Adelaide
Sam Davies+61 8 8468 [email protected]
Thea Eszenyi+61 8 8468 [email protected]
Brisbane
Anthony Connelly+61 7 3333 [email protected]
Anne-Maree Keane+61 7 3333 [email protected]
Canberra
Shane O’Keeffe+61 2 6222 [email protected]
Melbourne
Matthew Caddy+61 3 9038 [email protected]
Robert Smith+61 3 9038 [email protected]
Perth
Rob Kirman+61 8 6363 [email protected]
Research team
Kristen Legge Carlo Lucci Jessie Maguire Louise Mann Leah Sammut Thomas Scarf Lauren Scott-Logan
Cash and Working Capital Centre of Excellence
12Cash and Working Capital
Centre of Excellence
Basis of preparation
Peer group classificationThe Building Products, Construction & Engineering, Food & Beverage, Media & Leisure, Mining & Resources, Retail, Transport & Distribution and Utilities peer group samples underpinning this report have been selected according to the Global Industry Classification Standard (“GICS”) listed in the table opposite.
Accounting periods Financial information in this survey draws on most recently published full year accounts as at 31 October 2015 (i.e. the most recently published full year financial information prior to this date has been used). Prior year comparable figures may differ from our 2014 report for companies in the sample that adjusted their 2014 accounts following the release of our report. Adjustments may occur if a material error is identified or where there has been a change in accounting policy.
Peer group sample GICS groups included
Building Products Building productsConstruction materialsChemicalsTrading companies and distributors
Construction & Engineering Construction and engineeringEnergy equipment and servicesCommercial services and supplies
Food & Beverage Consumer staplesBeverages Food productsFood and staples retailing Manufacturers and distributors of food
Media & Leisure MediaLeisure
Mining & Resources MetalsMining MaterialsEnergy
Retail Textiles, apparel and luxury goodsSpecialty retailMultiline retailHousehold durablesDistributors
Transport & Distribution TransportationRoads and railAir freight and logisticsMarineCommercial services and suppliesCapital goods
Utilities Multi-utilitiesGas utilitiesElectric utilitiesElectrical equipmentOil, gas and consumable fuelsIndependent power producers and energy traders
The full peer group samples are included on pages 15, 16, 17, 18 and 19.
Data used in this survey has been sourced from the S&P Capital IQ platform.
13Cash and Working Capital Centre of Excellence
Basis of preparation
Source data
This publication contains high level financial information sourced from the S&P Capital IQ database of the latest available published financial statements of ASX listed entities for the 2015 financial year. The information contained herein is based on sources we believe reliable, but we do not guarantee its accuracy, and it should be understood to be general information only. The information is not intended to be taken as advice with respect to any specific organisation or situation and cannot be relied upon as such.
McGrathNicol accepts no responsibility for errors or omissions in financial information underpinning this publication, nor the loss of any person arising from use of or reliance on information herein. All readers of this publication must make their own enquires or obtain professional advice in relation to any issue or matter referred to in this publication.
Limitations
McGrathNicol acknowledges that at the level of detail applied, the analysis has limitations, some of which are noted below. For this reason, the analysis focuses on performance relative to the prior period, rather than in absolute terms against peers.
Days sales outstanding
Debtors include GST, whilst sales do not. To the extent that a company makes more or less of its sales in Australia (or another jurisdiction that levies a consumption tax), results will vary.
Days inventory outstanding
To the extent that a company has more or less labour included in its cost of sales, results will vary.
Days purchases outstanding
Creditors include GST, whilst cost of sales do not. To the extent that a company acquires inventory or input services in Australia (or another jurisdiction that levies a consumption tax), results will vary.
In addition, to the extent that there has been an accounting adjustment that has affected a company’s sales, purchases, debtors, inventory or creditors, this has not been isolated in the analysis and will be reflected as a change in working capital.
14Cash and Working Capital
Centre of Excellence
InventoryDIO = x 365
Cost of Sales
DebtorsDSO = x 365
Sales
CreditorsDPO = x 365
Cost of Sales
Calculation methodology
The working capital metrics referred to in this report have been calculated, as follows:
Days Sales Outstanding (“DSO”)
DSO is the number of days’ worth of sales represented by the outstanding debtors at the relevant calculation date. The calculation used in this survey is:
A low DSO metric is desirable and indicates that it takes a relatively low number of days for a company to collect debtors.
A low DIO metric is desirable and indicates a relatively high turnover of inventory.
Days Purchases Outstanding (“DPO”)
DPO is the number of days’ worth of purchases represented by the outstanding creditors at the relevant calculation date. The calculation used in this survey is:
A low DPO metric indicates that it takes fewer days for a company to pay its trade creditors. A high DPO is desirable from a cash flow and working capital management perspective, but can be an indicator of tight liquidity and the cause of strained supplier relationships.
A low DWC metric is favourable as it indicates a low level of working capital relative to the size of the business.
Days Working Capital Outstanding (“DWC”)
DWC is a relative measure of total working capital tied up in a company relative to sales. The calculation used in this survey is:
Days Inventory Outstanding (“DIO”)
DIO is the number of days’ worth of purchases represented by the inventory balances at the relevant calculation date. The calculation used in this survey is:
Debtors + Inventory - Creditors
DWC = x 365 Sales
Basis of preparation
Construction & Engineering
DSO DIO DPO DWC
Company name 2014 2015 Change 2014 2015 Change 2014 2015 Change 2014 2015 Change
Decmil Group Limited 78.8 37.5 (41.3) - - - 31.5 14.3 (17.2) 53.5 25.5 (28.0)
NRW Holdings Limited 64.5 37.6 (26.9) 29.5 24.9 (4.6) 54.0 34.1 (19.9) 54.7 32.7 (22.0)
UGL Limited 49.3 44.9 (4.4) 70.7 47.3 (23.4) 46.8 41.7 (5.1) 71.0 50.1 (20.9)
MACA Limited 84.8 52.5 (32.3) 3.1 8.8 5.7 48.9 26.8 (22.1) 45.3 36.9 (8.4)
MacMahon Holdings Limited 55.2 44.3 (10.9) 95.6 76.8 (18.8) 59.7 29.6 (30.1) 67.0 61.3 (5.7)
Ausdrill Limited 73.7 65.1 (8.6) 146.0 142.7 (3.3) 29.6 29.2 (0.4) 155.3 150.1 (5.2)
Transfield Services Limited 48.7 42.3 (6.4) 21.7 19.5 (2.2) 38.0 32.6 (5.4) 33.4 30.1 (3.3)
RCR Tomlinson Limited 64.4 68.9 4.5 6.3 6.2 (0.1) 22.9 30.9 8.0 49.3 46.2 (3.1)
Downer EDI Limited 59.1 59.5 0.4 22.1 21.2 (0.9) 20.0 22.2 2.2 60.9 58.6 (2.3)
Seymour Whyte Limited 65.2 67.0 1.8 - - - 42.1 45.4 3.3 32.2 34.2 2.0
Boart Longyear Limited 64.2 64.4 0.2 106.9 117.4 10.5 24.7 33.4 8.7 132.9 137.1 4.2
Cardno Limited 68.3 73.1 4.8 46.2 43.9 (2.3) 37.4 36.2 (1.2) 75.8 80.1 4.3
Calibre Group Limited 42.3 55.0 12.7 11.4 10.2 (1.2) 40.8 47.6 6.8 19.8 25.7 5.9
WorleyParsons Limited 79.3 91.9 12.6 - - - 19.6 22.1 2.5 60.9 71.1 10.2
Watpac Limited 37.8 53.5 15.7 14.1 8.7 (5.4) 8.2 6.5 (1.7) 43.2 55.5 12.3
Sedgman Limited 91.1 98.4 7.3 3.5 2.6 (0.9) 34.7 20.6 (14.1) 64.6 82.6 18.0
AJ Lucas Group Limited 30.1 67.6 37.5 80.1 65.0 (15.1) 34.1 49.3 15.2 57.4 75.8 18.4
Monadelphous Group Limited 60.8 89.0 28.2 - - - 5.1 14.1 9.0 56.2 76.3 20.1
CIMIC Group Limited 112.6 110.8 (1.8) 21.5 12.6 (8.9) 210.0 150.6 (59.4) 3.0 25.4 22.4
Peer group average 64.7 64.4 (0.3) 35.7 32.0 (3.7) 42.5 36.2 (6.3) 59.8 60.8 1.0
Building Products
DSO DIO DPO DWC
Company name 2014 2015 Change 2014 2015 Change 2014 2015 Change 2014 2015 Change
GWA Group Limited 75.9 54.4 (21.5) 174.8 122.3 (52.5) 88.4 64.4 (24.0) 126.9 88.3 (38.6)
Brickworks Limited 53.5 52.0 (1.5) 148.9 130.8 (18.1) 64.4 62.7 (1.7) 112.1 100.3 (11.8)
James Hardie Industries plc 40.9 33.0 (7.9) 68.9 73.8 4.9 34.7 32.2 (2.5) 63.5 60.1 (3.4)
Boral Limited 59.8 56.0 (3.8) 61.4 64.6 3.2 75.3 77.0 1.7 49.6 47.2 (2.4)
Reece Australia Limited 58.1 53.6 (4.5) 98.3 95.4 (2.9) 85.1 77.5 (7.6) 67.1 65.6 (1.5)
Adelaide Brighton Limited 52.6 53.1 0.5 52.8 54.3 1.5 40.9 42.2 1.3 61.8 62.5 0.7
Coventry Group Limited 58.0 58.5 0.5 164.9 183.1 18.2 48.1 70.5 22.4 127.3 128.4 1.1
Fletcher Building Limited 63.3 64.6 1.3 79.0 83.9 4.9 49.7 50.7 1.0 85.2 89.6 4.4
Peer group average 57.8 53.2 (4.6) 106.1 101.0 (5.1) 60.8 59.7 (1.1) 86.7 80.3 (6.4)
15Cash and Working Capital Centre of Excellence
Findings
Media & Leisure
DSO DIO DPO DWC
Company name 2014 2015 Change 2014 2015 Change 2014 2015 Change 2014 2015 Change
Village Roadshow Limited 41.1 53.1 12.0 33.0 42.4 9.4 207.4 283.9 76.5 (21.8) (39.1) (17.3)
Prime Media Group Limited 78.5 70.4 (8.1) - - - 2.2 7.0 4.8 76.9 65.6 (11.3)
Sky Network Television Limited 26.5 25.3 (1.2) - - - 43.5 60.6 17.1 5.7 (4.5) (10.2)
Fairfax Media Limited 56.6 60.0 3.4 6.1 6.3 0.2 37.3 43.7 6.4 31.1 28.9 (2.2)
News Corporation 59.1 55.4 (3.7) 22.0 23.2 1.2 19.6 17.4 (2.2) 60.5 58.8 (1.7)
oOh!media Limited 73.1 75.3 2.2 2.7 0.5 (2.2) 4.4 6.0 1.6 72.0 71.7 (0.3)
Seven West Media Limited 54.9 56.0 1.1 7.1 6.6 (0.5) 65.9 64.6 (1.3) 16.1 16.9 0.8
Amalgamated Holdings Limited 16.0 14.8 (1.2) 16.9 21.6 4.7 27.8 25.5 (2.3) 12.7 13.7 1.0
APN News & Media Limited 55.0 57.0 2.0 8.6 8.4 (0.2) 127.6 128.9 1.3 8.1 9.5 1.4
REA Group Limited 52.2 51.9 (0.3) - - - 34.9 29.0 (5.9) 43.9 45.6 1.7
Southern Cross Media Group Limited 63.0 66.9 3.9 - - - 30.8 29.7 (1.1) 57.2 61.7 4.5
APN Outdoor Group Limited 73.9 85.3 11.4 5.9 3.7 (2.2) 9.1 35.4 26.3 73.1 77.9 4.8
STW Communications Group Limited 151.2 137.5 (13.7) - 5.8 5.8 179.3 131.3 (48.0) 38.6 53.4 14.8
Nine Entertainment Co. Holdings Limited 90.0 74.3 (15.7) 0.3 - (0.3) 128.3 64.4 (63.9) (14.1) 17.8 31.9
Peer group average 63.7 63.1 (0.6) 7.3 8.5 1.2 65.6 66.2 0.6 32.9 34.1 1.2
Food & Beverage
DSO DIO DPO DWC
Company name 2014 2015 Change 2014 2015 Change 2014 2015 Change 2014 2015 Change
Blackmores Limited 74.3 82.9 8.6 122.6 93.4 (29.2) 82.0 127.7 45.7 87.8 71.9 (15.9)
Bellamy's Australia Limited 49.0 60.8 11.8 86.9 74.4 (12.5) 50.6 73.9 23.3 73.2 61.2 (12.0)
FFI Holdings Limited 47.4 44.1 (3.3) 87.5 85.6 (1.9) 56.2 60.1 3.9 64.3 57.2 (7.1)
Wesfarmers Limited 9.6 8.6 (1.0) 46.6 46.2 (0.4) 47.3 48.4 1.1 9.1 7.0 (2.1)
Woolworths Limited 3.3 3.5 0.2 38.5 40.3 1.8 37.7 41.6 3.9 3.9 2.5 (1.4)
Metcash Limited 28.3 27.2 (1.1) 22.4 21.0 (1.4) 43.8 41.9 (1.9) 8.8 8.2 (0.6)
Refresh Group Limited 34.0 33.4 (0.6) 115.8 119.2 3.4 47.7 32.0 (15.7) 62.5 72.7 10.2
Coca-Cola Amatil Limited 69.6 73.0 3.4 84.5 87.7 3.2 86.4 76.8 (9.6) 68.5 79.2 10.7
Patties Foods Limited 64.8 71.9 7.1 101.8 105.9 4.1 53.1 42.2 (10.9) 96.5 114.6 18.1
Gage Roads Brewing Co Limited 34.9 31.7 (3.2) 72.0 65.7 (6.3) 206.3 156.2 (50.1) (35.3) (12.6) 22.7
Freedom Foods Group Limited 88.7 107.8 19.1 128.3 153.0 24.7 72.6 93.3 20.7 122.9 145.9 23.0
Peer group average 45.8 49.5 3.7 82.4 81.1 (1.3) 71.2 72.2 1.0 51.1 55.3 4.2
16Cash and Working Capital
Centre of Excellence
Findings
Mining & Resources
DSO DIO DPO DWC
Company name 2014 2015 Change 2014 2015 Change 2014 2015 Change 2014 2015 Change
Newcrest Mining Limited 21.1 18.9 (2.2) 94.4 88.6 (5.8) 10.4 18.3 7.9 85.5 72.7 (12.8)
Fortescue Metals Group Limited 18.2 13.9 (4.3) 76.5 38.0 (38.5) 20.7 8.7 (12.0) 51.4 39.2 (12.2)
Rio Tinto Limited 33.5 27.7 (5.8) 58.0 46.8 (11.2) 31.3 27.9 (3.4) 52.3 41.2 (11.1)
AngloGold Ashanti Limited 19.5 16.7 (2.8) 96.0 78.3 (17.7) 44.4 35.0 (9.4) 57.1 51.1 (6.0)
New Hope Corporation Limited 34.3 28.2 (6.1) 61.2 75.3 14.1 46.0 55.6 9.6 43.6 39.1 (4.5)
BHP Billiton Limited 45.4 40.7 (4.7) 229.9 200.4 (29.5) 266.6 226.7 (39.9) 39.2 36.1 (3.1)
Sandfire Resources NL 10.1 6.5 (3.6) 47.8 40.6 (7.2) 58.4 50.2 (8.2) 4.5 1.7 (2.8)
Sims Metal Management Limited 23.8 21.5 (2.3) 31.3 30.8 (0.5) 21.8 20.6 (1.2) 32.5 30.6 (1.9)
Arrium Limited 36.1 38.6 2.5 82.6 67.2 (15.4) 78.6 66.1 (12.5) 39.4 39.6 0.2
Alcoa Inc. 28.8 32.5 3.7 51.2 59.0 7.8 56.0 60.3 4.3 24.8 31.4 6.6
Yancoal Australia Limited 56.5 82.1 25.6 48.4 41.7 (6.7) 61.5 67.1 5.6 47.7 64.6 16.9
Whitehaven Coal Limited 33.9 48.3 14.4 48.4 78.9 30.5 39.2 41.2 2.0 39.6 68.9 29.3
Peer group average 30.1 31.3 1.2 77.1 70.5 (6.6) 61.2 56.5 (4.7) 43.1 43.0 (0.1)
Retail
DSO DIO DPO DWC
Company name 2014 2015 Change 2014 2015 Change 2014 2015 Change 2014 2015 Change
Pacific Brands Limited 78.6 41.4 (37.2) 272.7 119.4 (153.3) 108.6 80.2 (28.4) 160.7 61.2 (99.5)
SurfStitch Group Limited 13.5 5.5 (8.0) 196.6 195.8 (0.8) 135.1 163.4 28.3 48.2 25.6 (22.6)
Godfreys Group Limited 11.1 9.4 (1.7) 111.1 108.9 (2.2) 45.5 73.1 27.6 42.3 25.8 (16.5)
AMA Group Limited 48.7 44.5 (4.2) 81.8 69.2 (12.6) 53.4 63.2 9.8 61.7 47.1 (14.6)
The PAS Group Limited 36.8 32.0 (4.8) 80.1 88.6 8.5 8.6 24.0 15.4 67.0 60.0 (7.0)
The Reject Shop Limited 0.3 - (0.3) 92.4 86.5 (5.9) 28.9 31.0 2.1 35.9 31.0 (4.9)
Fantastic Holdings Limited 7.6 3.4 (4.2) 119.3 119.9 0.6 13.8 9.9 (3.9) 66.2 64.4 (1.8)
Super Retail Group Limited 6.0 3.8 (2.2) 154.7 144.9 (9.8) 64.6 55.9 (8.7) 55.8 54.4 (1.4)
Burson Group Limited 33.6 31.5 (2.1) 125.0 128.2 3.2 91.6 92.6 1.0 53.3 52.3 (1.0)
Simonds Group Limited 28.8 26.1 (2.7) 54.2 53.8 (0.4) 28.2 24.7 (3.5) 49.4 48.6 (0.8)
Automotive Holdings Group Limited 22.6 22.2 (0.4) 67.1 68.0 0.9 11.2 9.5 (1.7) 65.8 66.0 0.2
Specialty Fashion Group Limited 2.2 4.1 1.9 130.4 99.1 (31.3) 36.4 19.4 (17.0) 36.9 37.1 0.2
JB Hi-Fi Limited 7.4 8.1 0.7 61.4 61.2 (0.2) 32.7 32.4 (0.3) 29.9 30.6 0.7
Myer Holdings Limited 2.2 1.8 (0.4) 94.5 93.2 (1.3) 51.0 46.8 (4.2) 25.3 26.7 1.4
McPherson's Limited 63.0 58.7 (4.3) 80.7 101.2 20.5 54.8 65.7 10.9 78.1 79.8 1.7
17Cash and Working Capital Centre of Excellence
Findings
Retail continued
DSO DIO DPO DWC
Company name 2014 2015 Change 2014 2015 Change 2014 2015 Change 2014 2015 Change
Billabong International Limited 55.8 57.5 1.7 137.7 138.6 0.9 99.3 99.1 (0.2) 73.7 76.0 2.3
Kathmandu Holdings Limited 0.2 0.1 (0.1) 261.6 262.5 0.9 29.9 33.0 3.1 85.6 88.4 2.8
Premier Investments Limited 4.9 5.5 0.6 105.4 116.3 10.9 37.6 39.7 2.1 30.5 33.5 3.0
ARB Corporation Limited 48.7 46.7 (2.0) 195.1 189.8 (5.3) 71.4 55.0 (16.4) 103.5 107.9 4.4
AP Eagers Limited 13.0 14.4 1.4 68.2 73.6 5.4 10.9 11.5 0.6 60.0 65.0 5.0
Nick Scali Limited 0.4 0.6 0.2 123.9 144.2 20.3 40.0 42.4 2.4 33.6 40.6 7.0
GUD Holdings Limited 57.1 65.3 8.2 109.4 118.9 9.5 59.0 68.7 9.7 88.8 96.7 7.9
Lovisa Holdings Limited 4.4 2.3 (2.1) 119.4 177.9 58.5 50.0 55.4 5.4 21.0 30.4 9.4
Breville Group Limited 53.6 60.9 7.3 94.2 111.7 17.5 78.3 87.9 9.6 64.3 76.9 12.6
Beacon Lighting Group Limited 19.4 14.0 (5.4) 218.9 257.3 38.4 67.1 33.9 (33.2) 72.2 91.3 19.1
OrotonGroup Limited 6.6 11.7 5.1 214.9 265.2 50.3 78.0 77.5 (0.5) 58.0 85.3 27.3
Peer group average 24.1 22.0 (2.1) 129.6 130.5 0.9 53.3 53.7 0.4 60.3 57.8 (2.5)
Transport & Distribution
DSO DIO DPO DWC
Company name 2014 2015 Change 2014 2015 Change 2014 2015 Change 2014 2015 Change
MMA Offshore Limited 123.6 91.9 (31.7) 4.5 2.5 (2.0) 19.8 14.6 (5.2) 110.8 81.2 (29.6)
Steamships Trading Company Limited 78.2 66.3 (11.9) 142.2 72.2 (70.0) 119.2 97.2 (22.0) 82.4 61.0 (21.4)
Aurizon Holdings Limited 62.2 53.1 (9.1) 32.4 31.3 (1.1) 54.8 56.4 1.6 48.0 38.2 (9.8)
Brambles Limited 73.7 68.7 (5.0) 6.7 8.1 1.4 48.2 49.5 1.3 46.5 41.6 (4.9)
McAleese Limited 46.1 35.7 (10.4) 1.3 3.3 2.0 38.5 32.7 (5.8) 15.0 11.3 (3.7)
K & S Corporation Limited 51.2 45.4 (5.8) 4.1 3.7 (0.4) 73.4 65.9 (7.5) 11.9 10.7 (1.2)
CTI Logistics Limited 52.9 58.0 5.1 5.7 1.3 (4.4) 37.8 40.3 2.5 27.1 26.7 (0.4)
Qube Holdings Limited 55.1 53.0 (2.1) 1.1 0.7 (0.4) 40.5 38.0 (2.5) 25.4 25.1 (0.3)
MaxiTRANS Industries Limited 44.6 49.2 4.6 93.9 97.7 3.8 50.9 57.9 7.0 70.5 73.4 2.9
Asciano Limited 39.9 42.8 2.9 4.5 6.1 1.6 20.9 22.4 1.5 28.8 32.2 3.4
Lindsay Australia Limited 49.9 52.7 2.8 18.9 21.7 2.8 37.1 37.7 0.6 35.0 39.7 4.7
Peer group average 61.6 56.1 (5.5) 28.7 22.6 (6.1) 49.2 46.6 (2.6) 45.6 40.1 (5.5)
18Cash and Working Capital
Centre of Excellence
Findings
Utilities
DSO DIO DPO DWC
Company name 2014 2015 Change 2014 2015 Change 2014 2015 Change 2014 2015 Change
Energy Developments Limited 53.6 45.3 (8.3) 63.1 73.3 10.2 74.3 86.5 12.2 47.6 38.9 (8.7)
Pacific Energy Limited 50.1 43.8 (6.3) 120.7 81.1 (39.6) 173.9 146.6 (27.3) 47.2 39.0 (8.2)
ERM Power Limited 35.6 34.3 (1.3) 10.4 6.0 (4.4) 33.1 34.5 1.4 13.8 6.9 (6.9)
Origin Energy Limited 75.7 68.4 (7.3) 10.4 9.5 (0.9) 81.7 81.0 (0.7) 17.5 11.6 (5.9)
AusNet Services 57.1 45.4 (11.7) 66.1 54.1 (12.0) 328.9 246.1 (82.8) 23.0 18.9 (4.1)
Spark Infrastructure Group 13.8 15.1 1.3 - - - - - - 13.8 15.1 1.3
Genesis Energy Limited 39.4 35.5 (3.9) 25.0 19.9 (5.1) 51.9 39.5 (12.4) 21.0 21.9 0.9
AGL Energy Limited 66.5 64.7 (1.8) 8.6 18.4 9.8 49.6 56.0 6.4 34.5 37.1 2.6
DUET Group 38.7 44.3 5.6 20.0 19.0 (1.0) 20.0 16.6 (3.4) 38.7 45.1 6.4
Ethane Pipeline Income Fund 9.8 31.4 21.6 - - - 0.8 0.3 (0.5) 9.6 31.4 21.8
Peer group average 44.0 42.8 (1.2) 32.4 28.1 (4.3) 81.4 70.7 (10.7) 26.7 26.6 (0.1)
19Cash and Working Capital Centre of Excellence
Findings
Auckland +64 9 336 4655 Level 17, 34 Shortland Street Auckland 1010 New Zealand
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
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