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10/09/2010
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December 13, 2006
· 2005/2006 fiscal year net profit: €10.4 million
· Positive Free Cash Flow of €6.1 million
· Implementation of a major Strategic Reorientation
Plan to increase profitability and cash flow
2005/2006 fiscal year net profit: €10.4 million
RODRIGUEZ GROUP’s 2005/06 financial year ended on 30 September 2006.
It should be noted that, for the first time, the results are presented in accordance with IFRS and particularly the recognition of new yacht sales in line with their state of completion and no longer on delivery, as previously.
Rodriguez Group realized sales of €474.7 million at September 30, 2006, in line with previous year sales (€474.9 million).
Profit from operations was € 20.7 million, compared to € 57.5 million in the 2004/05 fiscal year.
As previously indicated, the significant decline in profit from operations was primarily due to losses incurred and provisions established in respect of the Pre-Owned Yachts business. The Group sharply responded to changes in its customers’ behavior regarding Pre-Owned Yachts by immediately implementing the Strategic Reorientation Plan, as described below.
Net profit - Group share was €10.4 million, compared to €38.4 million in 2004/05.
Positive Free Cash Flow
The objective of generating positive free cash flow as early as 2006 has been met, thanks in particular to working capital requirements optimization.
Thus, the Group generated positive free cash flow of €6.1 million, compared to negative cash flow of €34.3 million in 2004/05.
Cumulative Sales Order Backlog (current and subsequent years)
In spite of a sharp reduction in trade-in on New Yacht sales over the past weeks, our cumulative IFRS sales order backlog increased to €405 million, compared to €391 million* the previous year.
*sales order backlog of €436 million, restated by €45 million corresponding to sales recognized by stage of completion at September 30, 2005
Strategic Reorientation Plan
Our Strategic Reorientation Plan has the following four objectives:
Improve our Product Mix
· The launch of very large models, such as Mangusta 148’, Leopard 42 meters and 45 meters, will be accelerated. From 2008, about 80% of New Yacht sales will be generated by yachts in excess of 30 meters.
Improve profitability
· Trade-in will be limited to a maximum 20% of New Yacht sales, compared to 35% to 40% over the past few years.
· Based on tests carried out over the past few weeks with our customers and orders received, which included very little trade-in, the Group considers the decision will only have a limited impact on New Yacht sales.
· Therefore, the Group objective for 2006/07 New Yacht sales is €300 million.
Increase Cash Flow
· Preferential partnership agreements for pre-owned yachts will be signed with leading brokers in a number of flourishing regions, enabling the Group to significantly increase its pre-owned yacht sales potential without increasing fixed costs.
Stimulate the share price
· An Investor/Analyst Relations Officer will be recruited as soon as possible, in order to step up the Group’s financial communication and highlight the advantages of our new strategy.
· It will be recommended to RODRIGUEZ GROUP Annual General Meeting not to pay out any dividend in respect of the 2005/06 fiscal year, but to implement a share buy-back program.
· A share buy back program will also be initiated by the RODRIGUEZ Family.
The positive effect of the Strategic Reorientation Plan, which will be felt as early as 2007, should enable the Group to strongly improve both profitability and cash flow in the coming years.
RODRIGUEZ GROUP SA shares are listed on Eurolist Compartment B of the Euronext Paris Stock Exchange and are a component of the Next Prime segment (ISIN Code: FR0000062994) and the SBF 250 and Next 150 indices. Its shares are eligible for SRD (Deferred Settlement Service)..
· Positive Free Cash Flow of €6.1 million
· Implementation of a major Strategic Reorientation
Plan to increase profitability and cash flow
2005/2006 fiscal year net profit: €10.4 million
RODRIGUEZ GROUP’s 2005/06 financial year ended on 30 September 2006.
It should be noted that, for the first time, the results are presented in accordance with IFRS and particularly the recognition of new yacht sales in line with their state of completion and no longer on delivery, as previously.
Rodriguez Group realized sales of €474.7 million at September 30, 2006, in line with previous year sales (€474.9 million).
Profit from operations was € 20.7 million, compared to € 57.5 million in the 2004/05 fiscal year.
As previously indicated, the significant decline in profit from operations was primarily due to losses incurred and provisions established in respect of the Pre-Owned Yachts business. The Group sharply responded to changes in its customers’ behavior regarding Pre-Owned Yachts by immediately implementing the Strategic Reorientation Plan, as described below.
Net profit - Group share was €10.4 million, compared to €38.4 million in 2004/05.
Positive Free Cash Flow
The objective of generating positive free cash flow as early as 2006 has been met, thanks in particular to working capital requirements optimization.
Thus, the Group generated positive free cash flow of €6.1 million, compared to negative cash flow of €34.3 million in 2004/05.
Cumulative Sales Order Backlog (current and subsequent years)
In spite of a sharp reduction in trade-in on New Yacht sales over the past weeks, our cumulative IFRS sales order backlog increased to €405 million, compared to €391 million* the previous year.
*sales order backlog of €436 million, restated by €45 million corresponding to sales recognized by stage of completion at September 30, 2005
Strategic Reorientation Plan
Our Strategic Reorientation Plan has the following four objectives:
Improve our Product Mix
· The launch of very large models, such as Mangusta 148’, Leopard 42 meters and 45 meters, will be accelerated. From 2008, about 80% of New Yacht sales will be generated by yachts in excess of 30 meters.
Improve profitability
· Trade-in will be limited to a maximum 20% of New Yacht sales, compared to 35% to 40% over the past few years.
· Based on tests carried out over the past few weeks with our customers and orders received, which included very little trade-in, the Group considers the decision will only have a limited impact on New Yacht sales.
· Therefore, the Group objective for 2006/07 New Yacht sales is €300 million.
Increase Cash Flow
· Preferential partnership agreements for pre-owned yachts will be signed with leading brokers in a number of flourishing regions, enabling the Group to significantly increase its pre-owned yacht sales potential without increasing fixed costs.
Stimulate the share price
· An Investor/Analyst Relations Officer will be recruited as soon as possible, in order to step up the Group’s financial communication and highlight the advantages of our new strategy.
· It will be recommended to RODRIGUEZ GROUP Annual General Meeting not to pay out any dividend in respect of the 2005/06 fiscal year, but to implement a share buy-back program.
· A share buy back program will also be initiated by the RODRIGUEZ Family.
The positive effect of the Strategic Reorientation Plan, which will be felt as early as 2007, should enable the Group to strongly improve both profitability and cash flow in the coming years.
RODRIGUEZ GROUP SA shares are listed on Eurolist Compartment B of the Euronext Paris Stock Exchange and are a component of the Next Prime segment (ISIN Code: FR0000062994) and the SBF 250 and Next 150 indices. Its shares are eligible for SRD (Deferred Settlement Service)..