Cedar Creek Company 2008 – 2009 Financial Results

Dated: Friday 2nd July 2010

 

Following a protracted delay Cedar Creek Group has completed the results for Financial Year 2008 - 2009.

The net result of the Group's trading activities for the financial year was a profit of $600,000.00. This has been an incredible result for the Group considering that during this period the Group needed to absorb nearly $3 million of extra-ordinary cost associated with the acquisition of SASTEK Pty. Ltd. and SASTEK (NZ) Ltd.

Cedar Creek Company CEO Sean Clitheroe said:

"This was an exceptionally difficult year for the Group as not only did we need to work through the merge of the two companies but it was the commencement of the Global economic downturn which saw falling revenues."

With falling revenues during the Financial Year 2008 - 2009 the Group needed to reduce staff numbers. This was achieved partly by a restriction on new and replacement recruitment but also a number of redundancies were required.

With the end of the Financial Year 2009 - 2010 we are still to complete these figures however our expectation is to return a profit similar to the Financial Year 2008 - 2009. This profit is also on downturned revenue which should be about $13.5 million, 20% below forecast.

This expected profit was achieved with close scrutiny on all expenditure. The Group also reviewed all under performing operations, business unit & assets and commenced a process of closing and divesting these areas. The majority of this work has been completed with the last under performing operation to be finalised in the 1^st quarter of the Financial Year 2010 - 2011.

The forecast for the Financial Year 2010 - 2011 is for a 10% increase in revenues to $15 million, with a profit of about 8.7% of revenue. The forecast is to maintain current staffing levels and reduce overall operating expenditure.

The Group has already made some significant changes to the structure to facilitate a more financial secure future:

• Following the resignation of 2 managers within the Group prior to June 30^th 2010, the Group will not be recruiting replacement but restructuring and absorbing those positions within. This is expected to bring up to $500,000.00 savings in salaries and unnecessary expenditure.
• The Group has successfully renegotiated with our key bankers to restructure our financing arrangement which will allow the Group to reduce the cash pressure and allow better funding to the operations of the Group.
• By the 2^nd Quarter, the Group will have recruited a new Senior Sales Executive to help drive new sales for the Group.
• Significant effort is being made in improving processes around service delivery to ensure long-term customer satisfaction and retention.

Sean Clitheroe summarised "The previous 2 years have been a difficult time within the market place. The Cedar Creek Group still believe there is at least another 6 months of hard work ahead of us, but we have made changes to the business that will not only allow the Group greater opportunity to withstand this period but to be in a stronger position following."