Thursday, July 21st, 2011
The Directors of ADG Global Supply Limited (ASX: ADQ) (“ADG” or “the Company”) are pleased to announce that the Company has delivered on its turnaround strategy surpassing revenue guidance by 21% to $52m, a 45% increase from FY2010. After reporting a half year EBIT of 100k the Company has finished strongly with an unaudited EBIT of $1.3m.

2011 Year Highlights

1) Management delivers on turnaround strategy

2) Delivered sustainable profitable growth and EBIT improvement

3) New contract backed revenue streams

4) New and enhanced global network of infrastructure and supply chain capabilities

5) International JV involving Project Logistics & Shipping

The turnaround was supported by the recovery in the resource industry as a whole. ADG continued to grow its presence in Africa with sales in the region equalling 40% of the total sales whilst the Australia and Asia regions produced 39% and 21% respectively. EBIT continues to improve as investment into the Company’s infrastructure, systems and its supply chain capabilities progresses. Profitability would have been higher but floods and unusual weather conditions on the east coast of Australia affected higher margin activities within the Company’s water and drilling products business.

Cash flow improved from renegotiation of supplier credit terms previously limited by the Company’s past financial results. The Company also reduced its bank debt with the ANZ by repaying $1.2m.

A focus on investor relations over the past twelve months saw two Share Placements raising $5.5m. The Company’s share register was strengthened with the addition of small cap institutional investors and high net worth individuals. The additional funds raised through Placements bolstered the Company’s balance sheet allowing for expansion to support ADG’s global resource and energy clients.

Delivering on Strategy

In June 2010, the Company announced a new strategy of driving sustainable contract backed revenue and profitable growth with a focus on enhancing internal capabilities, systems and processes. The Company is pleased to confirm that the commitment to this strategy has underpinned a strong result for Financial Year 2010/2011.

ADG’s Managing Director John Mancini said, “During the past year we have adopted a number of internal metrics to measure our success. Key to our strategy was being fit for growth so over the past 12 months our systems and processes have been significantly advanced in order to increase our productivity and efficiency levels.” “The most pleasing aspect was that we managed to fundamentally change the way we do business with an increase in headcount of only two.”

ADG continued to invest in expanding its global infrastructure and operational capabilities. Logistics consolidation hubs were established near key industrialised buying and shipping locations around the world to offer a truly global supply chain that can support client’s needs. Furthermore, last month the Company announced it had entered into a Joint Venture with Denmark based Airland Projects which created an integrated project logistics and shipping solution for mining clients in Africa.

2011/2012 Outlook

Management expects growth in Revenue and Improved EBIT margin

Management has completed its internal budgets taking into account a considerable pipeline of opportunities and is expecting further uplift in revenue with an improved EBIT margin in the Financial Year 2011/2012. This improvement will reflect operational freight cost rationalisation, supplier rebates, reduction of the fixed cost structure and uplift expected in our products business. The Company is also evaluating plans for expansion to support key growth regions as well as the introduction of new product groups.

“As we enter the new Financial Year it is clear that our traditional search and deliver origins have very much moved towards a true partnership model, delivering customised value-add solutions to our clients,” said Mancini, “We are concentrating on areas that deliver sound operating margins and we are very well positioned to capture significant new contracts from the growing demand for our integrated product and service offer in resource and energy markets.”

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ADG Global Supply

ADG Global Supply (ASX:ADQ) is a provider of industrial products, supply chain and global procurement services. We work with clients in the exploration, drilling, mining, oil and gas markets to improve their supply chain effectiveness through our ‘single contact – global reach’ model. Headquartered in Perth Western Australia, our strategic approach allows customers to benefit from streamlined supply utilising our global network.
Joanne Stewart
P: 08 9249 7599


ASX, ADG Global Supply, revenue increase, fy11 results, mining services, new contracts



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