Ladies and gentlemen, good morning. My name is Murray Boyte. I am Chairman of NTAW Holdings Limited. My pleasure to welcome all shareholders, proxies, and guests to the company's 2026 annual general meeting. We appreciate the opportunity to present our results to shareholders and deal with other important terms of business. Today's meeting is being held both online via Computershare's meeting platform and in person here at HPX Group. For those participating online, you can watch a live webcast of the meeting. In addition, shareholders and proxies have the ability to ask questions and submit votes. If we experience any technical issues today, a short recess or an adjournment may be required depending on the number of shareholders being affected. If this occurs, I shall advise you accordingly. It is now just after 10:00 A.M., and a quorum is present, so I formally declare the meeting open.
I will take this opportunity to introduce you to members of the board of directors and senior executive team who are joining us today for the meeting. Managing Director and Chief Executive, Warwick Hay. Co-founder and Non-Executive Director, Terry Smith. Founder of Dynamic Wheel Company and Executive Director, Chris Hummer. Non-Executive Director, Ken Gunderson-Briggs. Non-Executive Director, John Cunningham. Non-Executive Director, Tynan Young, who has joined us online. Representing the management team are the Company Secretaries, Hugh McMurchy and Stephanie So. Also present are the company's auditors from Pitcher Partners, Sean Troyahn. Sean will be available during the meeting to answer any questions in relation to the audit matters. Our share registry, Computershare, is also present today, and I appoint David Maffescioni as our returning officer and to conduct the poll.
I also welcome founders of each of the businesses the group owns, several of whom are shareholders, continue to be involved in the business. The format for today's meeting will be as follows. I will deliver my Chairman's address, and the Managing Director, Warwick Hay, will present an overview of the group's 2026 financial year performance and the FY 2027 outlook. After these presentations, we will deal with each item of business on the notice of meeting in turn. Questions. Shareholders can submit questions via the online platform throughout the meeting, which we will address during each item of business. To ask a question, select the Q and A icon, select the item your question relates to, and type your question into the text box. Once you have finished typing, please press the send button. To ask a verbal question, please follow the instructions written below the broadcast window on the platform.
For those in the room, please simply raise your yellow or blue voting card to ask a question. To ensure we can answer as many questions as possible during each item of business, please submit your questions early in the meeting. Please also note that questions may be moderated, or if we receive multiple questions on one topic, they will be amalgamated together. Finally, if there is insufficient time to answer all questions, we will answer them in due course via email and make the information available for all shareholders on our website. Voting today will be conducted by way of a poll on all items of business. In order to provide you with enough time to vote, I will shortly open voting for all resolutions. At that time, if you are eligible to vote, select the vote icon, and all resolutions will be activated with the voting options.
To cast your vote, simply select for, against, voting card accordingly. If you already lodged a proxy vote, please note that you do not need to vote again through the online voting portal unless you wish to change your proxy instruction, as your votes will already be counted in the poll with each resolution as per your proxy instruction. To allow shareholders time to submit votes and ask questions, I now declare voting open on all items of business. Voting will remain open until I declare it closed at the end of the formal business. I will now move to my formal address. Ladies and gentlemen, it is my pleasure to welcome all shareholders here today to the Annual General Meeting of NTAW Holdings Limited.
As you read in the annual report, the group has reported a loss after tax and discontinued operations of AUD 13.6 million for the year ended 30 June 2026, a second consecutive year of unacceptable results. At last year's AGM, our CEO and Managing Director, Warwick Hay, set out in his presentation the key priorities to be actioned in a program to reset the business. Warwick will talk to these initiatives and the results in his address today. Revenue declined AUD 83 million from the 2025 financial year, reflecting the termination of the Australian Dunlop distribution agreement, ceasing distribution of Alliance products, and the planned exit for unprofitable non-core retail operations. Despite the reduction in revenue, gross profit margin increased by 8% to 30.8% from 28.5%.
During FY 2026, significant progress was made in reducing the cost base, optimizing inventory management, and strengthening supplier relations, particularly with key Chinese suppliers who have entered growth-supportive initiatives and multi-year contracts with NTAW. The national distribution networks of NTAW in Australia and New Zealand, industry knowledge, and improving service standards are providing a competitive advantage that has been recognized by our suppliers and customers. In July and August 2026, the group completed the sale of the Black Rubber Western Australian operations and the sale of its 50% interest in Tyrelife Solutions South Africa. These divestments reduced the group's complexity and lowered operational risk. While the 2026 result is again disappointing, management has delivered and executed on the priorities set at the commencement of the financial year.
The group now has a stabilized cost base, allowing it to focus on an operational and strategic plan that will return the group to profitable growth in its key markets. During FY 2026, Warwick set about to reshape his senior management team with key appointments in technology and marketing in Australia. The appointment of Rob Watson as the New Zealand Group CEO and the restructuring of the New Zealand operations to capitalize on supply chain and market synergies is starting to see benefits materialize. The recent appointment of Sonya Ryan as Chief Operating and Financial Officer will further strengthen the management team when she commences with NTAW in January 2027. Sonya is an experienced senior executive who has worked across a range of industries. Sonya is with us today, and we welcome you. Thank you for joining us. In March 2026, John Cunningham was appointed to the board.
John has over 30 years experience in management consulting, advising senior executive teams on strategy and operational excellence. John's experience covers a wide range of industries and his appointment broadens the skill base of your board. The first quarter results of FY 2027 are encouraging. However, the outlook is cautious given soft consumer spending, low growth in Australia and New Zealand because of elevated inflation, higher interest rates, higher energy costs, and low productivity.
Under the leadership of our managing director, we have a management team that can meet these challenges. I'd like to thank my fellow directors for their high level of commitment and contribution during the past 12 months. Our staff continue to work tirelessly to deliver on our service levels to our customers, both directly and indirectly. Finally, I would like to thank our shareholders for their continued support. It's very much appreciated by your board and management. Thank you. I'll now hand over to our Managing Director, Warwick Hay, to talk about the company's 2026 financial performance and the outlook.
Thanks, Murray. Good morning, everyone, and welcome. First, I'd like to take this opportunity to thank our key stakeholders, our investors, Commonwealth Bank of Australia, suppliers, customers, and staff for all the support through FY 2026. When I stood here last year, I described FY 2025 as a tale of two halves. I outlined four key priorities that would guide the group through FY 2026. First being around our balance sheet stability, second, revenue margin improvements, third, continued cost base refinements, and fourth, strengthen our core supplier partnerships. Today, pleased to report FY 2026 was a year of reset and delivery. The market conditions remain challenging across Australia and New Zealand, so we kept a focus on the things we could control, lowering our debt, improving margins, reducing inventory, simplifying the group's operating structure, and strengthening our supplier partnerships. FY 2026 results was again a story of two halves.
Group revenue was AUD 445 million, down AUD 83 million from AUD 528 million in FY 2025. As Murray outlined, this was communicated from revenue reductions reflected the termination of the Dunlop and Alliance distribution agreements and our planned exits from unprofitable non-core Black Rubber retail outlets. The cost reductions that we started in the second half of FY 2025 continued through FY 2026. The timing of these initiatives meant EBITDA margin improved, lagged in the first half of the financial year. In the second half, revenue stabilized, cost reductions realized, and growth across several key commercial product categories were achieved, which saw a step change in our earnings. The gross profit margin improved from 28.5% in FY 2025 to 30.8% in FY 2026, reaching 31.4% in the second half of FY 2026. This reflects disciplined pricing, more effective promotional activities, and a focus on higher profit product ranges.
Operating expenses reduced by approximately AUD 9 million compared to FY 2025, excluding any one-off restructuring costs. Operating EBITDA increased 45% from AUD 10.4 million in H1 of 2026 to AUD 15 million in H2 of 2026, for a full year result of AUD 25.4 million. EBITDA margin improved from 4.4% in H1 2026 to 6.1% in the second half of FY 2026. While there remains work to be done, these results show that we have addressed some of the fundamental issues in the business and now positioned to shift towards steady growth. Delivering on our commitments, what did we achieve for our priorities in FY 2026? The first one around balance sheet stabilization. Inventory process is now standard across our network, so we have the right stock, right locations at the right time. This resulted in transfers between our major DCs in Australia falling by 27%.
Inventory was reduced from AUD 127 million in June 30, 2025, to AUD 107 million in June 30, 2026. We agreed revised covenant structures with CBA, giving the group greater flexibility to execute our plans. Debt, our bank debt was reduced by AUD 13.9 million. Our exit from South Africa was completed in July 2026 with the sale of our 50% interest in Tyrelife Solutions. Second, revenue and margin improvement. Australian wholesale business built on positive momentum with truck and bus segment sales up 6% and off-road sales up 8% in H2 of 2026 compared to the first half. Tyres4U New Zealand continued to grow through stronger penetration in its existing truck and bus accounts. Dynamic Wheel Co New Zealand launched a standalone business in September of 2025. In its first year, revenue grew by more than 40%, and we have secured some national distribution agreements with Capricorn and Tyrepower.
Dynamic Wheel Co Australia opened a new growth channel with its first battery-backed OEM program with a bespoke wheel for the BYD Shark 6. Carter's maintained steady revenue in tough conditions with no major customer losses and several new smaller customers acquired. Its proprietary fleet tyre management system is now being trialed in Australia. Third, cost base refinements. In the second half of 2026, we reduced our cost base by a further AUD 2 million, creating a stable platform for FY 2027. Warehouse configurations were reviewed, and as a result, consolidations have delivered reduced lease costs of 6% or AUD 1.2 million per annum. Some of this benefit is in FY 2026, and some will flow into FY 2027. At Black Rubber, we kept the back-to-basics approach. Retread improvements were achieved, and we completed the sale of our Western Australia operations in August 2026. Finally, strengthen core supplier partnerships.
We consolidated our Australian wholesale supply portfolio. 90% of the revenue now comes from 11 core brands, down from 15 in FY 2025. We signed multi-year agreements with GT, Cooper Tires, Mickey Thompson, Radar. Joint initiatives to grow more into the truck and bus markets in Australia and New Zealand have delivered encouraging results. All these actions simplify the group and is allowing management to focus on areas to move the group forward. Moving on to our priorities for FY 2027.
With a more stable platform now, FY 2027 is about controlled growth. We, again, have four key focus areas. First being, further revenue and margin improvements. We are looking to create a national tyre and wheel fleet offering in Australia, develop a centralized approach that leverages the contracted fleet customers that we have in the wholesale and the Black Rubber businesses, start looking at enhancing services, and support new customer acquisitions.
Ardus Tyre Services in New Zealand, complete the contract extension with Fonterra, which occurred in the first quarter of this financial year. Maintain existing customer base and seek sustainable growth opportunities. Black Rubber Retreading, improve the commercial viability of the Australian retreading businesses in H1 of 2027 by reviewing site configurations, implementing price increases, updating contract terms with our customers and suppliers. Dynamic Wheel Co in New Zealand, target double-digit growth in FY 2027, building on the market acceptance and executing our expansion strategy.
Additional products, pursue measured and controlled expansion into selected market segments, building on the good, better, best tyre portfolio we already have in play. Second being, cost-based refinements continue. Continue the warehouse consolidation program by consolidating inventory, reducing the footprint, and subletting any surplus space. Confirmed sublets are expected to deliver annualized benefits of around AUD 1.6 million or 7% annualized. Third being, further deepen core supplier partnerships.
Align our suppliers with the changing vehicle markets in Australia and New Zealand. Deliver new product innovations from our partners and expand ranges into selected segments. Use our multi-year agreements to support brand investment, training, promotional activities. Finally, around our balance sheet. Maintain a strong focus on our working capital inventory management. We expect inventory to remain at current levels throughout FY 2027. Continue to agree debt reduction. The CBA borrowing facility remains in place with an expiry date of 30th September 2027, subject to renegotiation. To the outlook. As Murray said, the first quarter of FY 2027 has delivered encouraging results, with the group well ahead of Q1 FY 2026. The outlook remains cautious, though. In Australia, GDP, consumer demand are expected to remain soft. Interest rates and inflationary pressure creating uncertainty.
In New Zealand, we expect modest improvement, supported by stable interest rates and improving GDP and a recovery in consumer transport demand throughout FY 2027. Ongoing geopolitical issues threaten supply chain stability and could put upward pressure on product and transport costs. However, against this subdued backdrop, NTD expects modest revenue growth supported by joint marketing and sales activities and initiatives with our core suppliers. We will continue to scale our NTAW fleet offer in Australia, and the Dynamic Wheel Co, and pursue selected product range expansions. Maintaining the gross profit margin from FY 2026, together with continued cost reductions and rationalizations and modest revenue growth, is expected to support stronger financial performance for FY 2027. We will maintain a strong working capital structure and review ongoing viability of business units producing unacceptable returns. I am also very happy to welcome Sonya Ryan as Chief Operating and Financial Officer.
Sonya is currently CFO of the Pedal Group and brings a wealth of experience from ASX-listed, private equity-backed, and multinational organizations in retail, agri, and travel sectors. I look forward to Sonya joining the team in January. Welcome. Also, as the group moves from a reset to a controlled growth and delivery, we improved our gross margin, refined our cost base, strengthened our balance sheet, and addressed many of the structural issues in the business.
While there remains more work to be done, we enter FY 2027 with stronger supplier relationships, improved operating disciplines, and a more stable platform in which to pursue growth. FY 2027 is about controlled growth, stronger supplier partnerships, and disciplined inventory management, and continue to build long-term value and stable financial base in which to generate returns for our shareholders. Once again, thank you to our employees, our customers, our suppliers, and our shareholders for your continued support. I look forward to reporting further progress during FY 2027. Thank you.
Thank you, Warwick. Now to the formal items of business, meeting and voting procedure. We will now consider the formal items of business to be put to shareholders as set out in the notice of meeting. The notice convening this meeting was dated 9 October 2026 and was made available to shareholders in accordance with the ASX Listing Rules and Corporations Act. If there are no objections, I propose to take the notice as read. Proxies. Valid proxies have been received and recorded and are open for inspection. Proxies have been received from shareholders for a total of 81,838,619 shares, representing 48.7% of the company's issued capital. The resolution, together with proxies received in respect of each resolution, will be shown on the screen as each item of business is put to the meeting.
As Chairman of the meeting, I intend to vote, where authorized, all undirected proxies in favor of resolutions one to six inclusive. Items of business. I propose to take each item in the sequence they are listed in the notice of meeting. I do not intend to read out the resolutions unless specifically requested to do so by a shareholder. Financial report. The first item of business is to receive and consider the financial reports, the Director's report, and the Auditor's report for 2026, which are contained in the annual report. There is no requirement that shareholders vote on, approve, or adopt these reports, and so this item does not require a vote.
The meeting is now open for discussion. If you have not already done so, please submit any questions you may have in relation to the management of the company or the audit of the financial statements. Before we go to the online questions, are there any questions from those here in the room in relation to the financial report? Stephanie, received any written, verbal, online questions?
Thank you, Chair. We have not received any questions on this item.
Thank you very much, Stephanie. No further questions. I will report on the report. I will move on to the next item of business. Resolution one, adoption of the remuneration report. The first formal resolution to be considered is the adoption of the remuneration report for the FY 2026 financial year. The vote on this resolution is advisory only and not binding on the company or the Directors. However, the Board will take into account any discussion on the resolution and outcome of the vote when considering the future remuneration policies and practices of the company. Proxy votes received in respect of this resolution are as displayed on the screen. Are there any questions on this resolution? Stephanie, have we any verbal questions?
Thanks, Chair. There are no questions on this item.
Thank you, Stephanie. As there are no further questions in respect of this item, I will move on to the next item of business. Resolution two, election of Mr. John Cunningham as a Director. The next item of business is resolution two and relates to the election of John Cunningham to the Board of Directors. John was appointed as a Director on 24 March 2026 and stands for election at this meeting. Details of John's qualifications and experience are outlined in the notice of meeting. The Directors, excluding John, unanimously recommend that shareholders vote in favor of this resolution. The proxies received in relation to this resolution are now shown on the screen. Are there any questions? Stephanie, do you have any written questions?
Thank you, Chair. There are no questions on this item.
Thank you, Stephanie. As there are no further questions in respect of this item, I will move on to the next item of business. Re-election of Mr. Christopher Hummer as a Director. This is the next item of business, Resolution three, and relates to the re-election of Chris Hummer to the Board of Directors. Details of Chris's qualifications and experience are outlined in the notice of meeting. The Directors, excluding Chris, unanimously recommend that shareholders vote in favor of this resolution. The proxies received in relation to the resolution are now shown on the screen. Are there any questions? Stephanie?
There are no questions on this item. Thanks, Chair.
Thanks, Stephanie. As there are no further questions in respect to this item, I will move on to the next item of business. Resolution four, approval of the employee incentive plan. The plan was last approved by shareholders at the 2023 Annual General Meeting, and reapproval is required to maintain the capacity exemption from the company's 15% placement capacity under ASX Listing Rule 7.1. The Directors unanimously recommend that shareholders vote in favor of this item. The proxies received in relation to the resolution are shown on the screen. Stephanie, any questions?
There are no questions online. Thanks, Chair.
Thank you very much. No further questions with respect to this item. We will move on to the next item of business. Approval to issue options to the Managing Director, Warwick Hay. This resolution five relates to the approval of Warwick Hay's participation in the company's employee incentive plan through the grant of options. The details of the options proposed to be issued are outlined in the notice of meeting. The Directors, excluding Warwick, unanimously recommend that shareholders vote in favor of the item. The proxies received in relation to the resolution are shown on the screen. Any questions? Stephanie?
There are no questions. Thanks, Chair.
Thanks, Stephanie. No further questions. Respect the item, I will move on to the next item of business. Approval to issue options to the Executive Director, Chris Hummer. This is approval of Chris Hummer's participation in the employee incentive plan and the grant of the options. The options proposed to be issued are outlined in the notice of meeting. The Directors, excluding Chris, unanimously recommend that shareholders vote in favor of this item. The proxies are shown on the screen. Stephanie, any questions?
None.
Thank you. Stephanie, that concludes the resolutions to be voted on today. Any other business? Any other items to be brought forward in conformity with the company's constitution? Any questions, Stephanie?
Sorry, that's a general question, so maybe that can be later.
There are no further items of general business. You have a question?
Well, there's one question from Mr. Thomas Marshall. The question is, "Any further debt repayments in Q1 of 2027?
No, there weren't, but there are planned debt repayments during the FY 2027 year.
There are no other online questions.
Thank you very much. There are no further items of general business. This brings us to the end of the formalities of the meeting. Are there any other general questions, Stephanie?
There are no further questions online.
If you have not already voted, please cast your votes. I am closing the poll shortly. A member of Computershare will now collect voting cards from those in this room. I think we have collected all those, have we? The voting cards have been collected. I declare the poll closed. The results of the poll will be released and made available on the ASX platform later today. No questions from the floor? Stephanie, no further questions?
No further questions online, Chair.
Ladies and gentlemen, that concludes the business of the meeting. I declare the meeting closed. On behalf of the board, I would like to thank you all for your participation and attendance at today's meeting, and for your continuing interest in the company. Thank you. Thank you, everybody.