XXXX DIRECTORS’ REPORT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2021
sales to E-commerce customers within their territories. Member stores have also reported customers visiting their stores after seeing products displayed on the website. Encouraging customers to visit Member stores is an important and successful outcome for the co-operative. The 2022 financial year was a more expensive period to run a distribution business through higher warehouse wages and labour hire costs. These costs remained at a similar level to the previous financial year even though sales declined by 8%. Finance charges were higher because of increased use of the finance facility. A decision was made during the year to invest in increased inventory holdings to reduce the risk of any supply chain disruptions and ensure our competitiveness against other distributors. During the financial year, a break down in our internal processes saw us cover the costs incurred in the amount of $77,022 (net of GST) to compensate a members’ business that would have suffered the potential loss. As a result, we now have more robust processes in place to ensure that this cannot happen again. The co-operative has historically held an annual face to face conference where the Member stores have an opportunity to network. Because of Covid it was necessary to postpone the event several times. In March 2022 the event was held as a state-based event. The postponements caused costs to be incurred that were not offset by revenue which would have been the case if the events had proceeded as normal. There were additional IT costs incurred to better provide access to information for Member stores and to assist with new arrangements with some customer groups. The new sales team was an additional investment by the company, late in the financial year, with the intention of growing sales. This was a carefully considered initiative that was delayed due to the influencing factors of Covid 19 and made its initial impact from March 2022 and only coming to strength in June. The benefits of this
investment strategy will more properly be evidenced during the 2022-2023 financial year. The Group reduced the balance of money owing to members by $260,700 (2021 $316,663) this financial year. It is the intention of the Board to continue to reduce this balance over the next financial year. Financial Review Key financial headlines of Go Vita Group Limited’s 30 June 2022 results are: Revenues of $32,438,473 Loss after tax of $57,388 Reduction in the balance of money owing to members by $260,700 Cash outflow by operations of $1,122,108. Factors decreasing profits: Lower earnings from 8% lower sales. Strategic investments and some higher costs as described above. COVID-19 Assistance and Support Received During the financial year, the Group received COVID-19 related support subsidies as outlined below:
Government Subsidy
Subsidy FY 2022
Subsidy FY 2021
ATO Cashflow boost
-
71,373
Jobsaver
98,502
-
NSW payroll tax 50% reduction
44,615
-
143,117
71,373
Liquidity and Funding At 30 June 2022 the group had net current assets of $3,417,279. At 30 June 2022 the group had undrawn bank facilities of $1,427,391. Based upon its cash reserves, undrawn finance facilities and expected ongoing earnings, the Group is confident it has sufficient funding capacity to meet all its obligations.
GO VITA GROUP LIMITED ANNUAL REPORT 2021-2022 I 35
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