Summary Highlights

  • Tenon is leveraged to both new housing and DIY/retail in the US, and will be a benefi ciary of the broader recovery in the US housing market as it progresses -
    • US industry activity now only at early cycle recovery levels
    • Upside potential from current industry activity level is therefore significant
  • New 5-year, $70 million syndicated debt financing facility established
  • Advancement of Australian strategy with the establishment of a new business relationship with the Masters Home Improvement chain
  • Announcement of optimisation upgrade at Taupo manufacturing site
    • $5 million project expenditure
    • 2.5 year payback
  • Revenue of $396 million recorded, up $32 million, or 9%, on the corresponding year -
    • Revenue from US pro-dealer customers up 15%+
    • Revenue from US DIY / retail customers up 5%+
    • Revenue from Europe and Australia up $4 million
  • A return to bottom line profi tability was recorded (net profit after tax of $2 million, corresponding prior period
  • $3 million loss). This result included -
    • $1 million of expenses relating to establishment of new financing facility
    • $1+ million earnings foregone from severe US winter weather storms
  • Operating profit before financing costs increased to $7 million (2013: $1 million)
  • Share price increased 37% across the period - 
    • NZX50, ASX50 and Dow Jones up 16%, 12% and 13% respectively
  • Potential mid-cycle4 EBITDA1 2 upgraded to circa $45 million (previously circa $35 million)
  • EBITDA1 2 is projected to increase again in fiscal 20153, as US housing market recovers
  • EBITDA1 2 for the 12 months more than doubled (i.e. up 120%) to $11 million
  • Shareholder Plan (completed) strongly supported by shareholders
  • Announcement of new share buyback program


1 EBITDA (i.e. Earnings before Interest, Taxation, Depreciation and Amortisation) is a non-GAAP earnings figure that equity analysts tend to focus on for comparable company performance analysis, because that number removes distortions caused by the difference in asset ages, depreciation policies, and debt:equity structures.
2 Tenon’s EBITDA is calculated as Net Profit/Loss after Taxation of $2 million (2013: $3 million loss), plus income tax expense of $1 million (2013: $nil million), plus financing costs of $4 million (2013: $4 million), plus depreciation and amortisation of $4 million (2013: $4 million). Please refer also to Note 1.
3 Eventual earnings outcome will be dependent upon continued US housing market recovery, interest rates, and NZ$:US$ FX rate (amongst other drivers).
4 Mid-cycle assumptions include US housing starts circa 1.7 million per annum and NZ$:US$ of 70 cents.