Good day, welcome to the Metro Performance Glass FY 2023 annual results conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Simon Mander. Please go ahead, sir.
Good morning, everyone. Welcome, and thank you for joining our call today. My name is Simon Mander, and I'm the CEO of Metro Performance Glass, and with me is our CFO, Brent Mealings. Just firstly, apologies for running a little bit late. We had a few technical issues getting everything connected up this morning. This morning, we'll provide you with an overview of the group's results for the 12 months to the 31st of March, 2023, and we'll then be happy to take any questions you may have. We'll start on slide two, where we have noted our key messages that summarize the year. Since the start of the calendar year, we've seen a significant improvement in international supply chain performance, with shipping rates stepping down progressively as supply and demand for freight space has normalized.
The cost-ou t program was successfully implemented in the back half of 2023 and will achieve annualized savings of NZD 8 million-NZD 9 million. We move into the new financial year, the improved performance of the international supply chain, combined with the cost-o ut program, successfully implemented at the back end of 2022, means the New Zealand business is well set for the first half of FY 2024. We made good progress with furnace programs in Highbrook and Christchurch, as we prepare the business for the expected increase in Low E glass production, driven by the recently announced and introduced H1 building code changes. Australian Glass Group delivered a milestone year, AUD 60.1 million in the year, which was driven by working capital requirements to mitigate disruptions in New Zealand and support a growing AGG business.
Moving to our key financial results for the full year on slide three, group EBIT of NZD 11.8 million was an increase of 100% on the prior comparable period, driven by a full trading period, thus concluding an additional year extension on its current syndicated banking facilities out to the end of October 2024. On slide four, New Zealand revenue of NZD 186.7 million was up 5% versus the previous comparable period, with an EBIT of NZD 6.4 million, down 11%. All of our segments faced disruptions to supply chains, project delays, and people availability challenges that impacted efficiency. In the final quarter of FY 2023, we saw a steady improvement in the performance on the New Zealand business, as freight cost reductions and the cost- out program had a positive margin impact year-on-year.
Our focus on continually improving the customer experience continues to reflect on positive levels of customer satisfaction, achieving 7.9 out of 10 in our November 2022 survey. Another key milestone was the installation of new furnace capability in Auckland and Christchurch. These projects have been executed very well and have significantly enhanced the throughput of both plants, as well as improving quality and reducing energy consumption. On to slide five. Australian Glass Group's revenue was up 32% at AUD 76.7 million, delivering an EBIT of AUD 6.4 million, up AUD 6.7 million on last year. We're pleased with another significant performance improvement with this business. It is also pleasing to see a further significant step up for the New South Wales division. AGG now enters the next phase of its strategy, having achieved its turnaround.
It is well positioned for growth alongside the increasing adoption of double glazing, with changes to the National Construction Code expected in 2023 that will further accelerate uptake. In February 23, we announced our intention to explore divestment options for the Australian business. AGG has solid fundamentals and a strong growth plan that leverages the growing adoption of double glazing in the southeast of Australia. As AGG enters the next phase of its growth strategy, it is now an appropriate time to consider the options for this business. I'll now hand over to Brent to discuss the financial results in more detail.
Thanks, Simon. Good morning, everyone. On slide six, we break our revenue down. In New Zealand, you can see an overall increase of 5%. RetroFit was the only segment to record a decrease year on year, after significant growth over the past two years. As Simon has already mentioned, we are happy to see a further improvement in the AGG business. I'd like to move to the waterfall on slide seven. Movements in New Zealand's EBIT result are shown in the gray shading. Our New Zealand EBIT result was NZD 1 million lower than the prior year, with higher revenue offset by increased input costs. Increases in distribution and glazing were partially offset by savings elsewhere. The reduction in other income is a result of the COVID wage subsidy being received in the prior reporting period.
Turning to the Australian performance, which is in the green shaded area of the waterfall, the encouraging story here is revenue growth and gross profit margin improvements that have offset the inflationary cost pressures. AGG has achieved a solid result for the year. Slide eight reflects our full-year results. The segmental results are on the right-hand side of the page. New Zealand's gross profit margin percentage is flat on last year, in line with expectations. We are seeing an improvement from Q4 FY 2023, as reducing freight costs and factory cost reductions begin to make an impact. In Australia, gross profit margin improved significantly, reflecting the pricing increases in response to cost inflation pressures, and also in recognition of the increasing value of glass throughout the industry.
Turning to the group results, our EBIT before significant items doubled year-on-year, driven by the strong result of the Australian business. Slide nine details the decision to impair the carrying value of New Zealand goodwill by NZD 10 million this year, which represented approximately 32% of the prior balance. The goodwill initially arose from the acquisitions completed in 2012, two years before Metro Glass' IPO. The carrying value of Metro Glass' intangible assets were reviewed as a result of the significant reduction in forecasted construction activity. Reflecting the heightened level of uncertainty at present, the impairment review was conducted using a set of future scenarios and required significant judgment. This impairment of goodwill is an accounting charge only with no impacts on cash flows or on banking covenants.
Accounting for the three significant items this year, being the NZD 10 million goodwill impairment, NZD 1.9 million of New Zealand restructuring costs, and NZD 150,000 related to the sales process of AGG, the group reported a statutory net loss after tax of NZD 10.5 million in FY 2023. Turning to the balance sheet on slide 10. Net operating cash flows were below the comparative period, primarily driven by requirements of working capital. Capital expenditure has reduced to NZD 6.2 million in the year, with a focus on targeted investments and maintenance capital only. On our net debt points on the slide, whilst the absolute level of net debt has increased as a consequence of working capital requirements, the net debt to EBITDA ratio has improved year-on-year.
As already mentioned, we expect the net debt to EBITDA ratio to continue to improve through the first half as working capital unwinds and EBITDA improves, driven by the New Zealand business. Simon?
Thanks, Brent. Turning now to our outlook for FY 2024 on slide 11. While the activity levels in the beginning of FY 2024 have remained steady, the economic outlook presents significant uncertainty for the number of consents issued and the dwellings ultimately constructed in FY 2024 and beyond. Economic headwinds from inflation, lower house prices, and other external pressures are likely to accelerate the decline in building activity through the second half of FY 2024. Metro Glass continues to monitor a range of scenarios. We have plans to continue to improve the profitability of the business. Slide 12 sets out our short-term confidence. International freight costs and disruption have moderated. Combined with the increasing demand for Low E products, driven by new H1 building code, the level of financial performance in the first half of FY 2024 is expected to be better than the prior comparable period.
We expect net debt to be below NZD 55 million by the half year as performance of the New Zealand business improves, working capital unwinds, and AGG continues to perform. As announced earlier this year in March, we expect AGG to continue to perform well in FY 2024, with forecast revenue, EBITDA, and EBIT of approxima`tely AUD 79 million, AUD 11.5 million , and AUD 7.5 million, respectively. While the signal declines in economic conditions are a concern, Metro Glass continues to be focused on improving its performance and has formulated plans to respond to an uncertain future. That brings us to the end of our presentation, and we're very happy now to answer any questions that you may have. Thank you.
Thank you. If you'd like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. A voice prompt on the line will indicate when your line is open. Please state your name before posing your question. Again, let's press star one to ask a question, and we'll pause for a moment to allow everyone an opportunity to signal. Once again, that's star one to ask a question. At this time, I'm showing there are no questions. Mr. Mander, I'll turn the conference back over to you.
Okay, thank you, everyone.
This concludes today's call. Thank you for your participation. You may now disconnect.