Chairman's Report

We increased our cash flow, paid off all our bank debt, improved our profit margins, strengthened our balance sheet and were able to report a 68 per cent increase in net profit.

Over the past year we have made significant progress with improving our business to overcome some of the toughest trading conditions in NONI B’s history.

Tight controls

We improved our planning processes, tightened control of expenses, carefully managed stock levels and resisted the temptation to discount heavily to increase sales, confident that we already offer excellent value. As a result we increased our cash flow, paid off all our bank debt, improved our profit margins, strengthened our balance sheet and were able to report a 68 per cent increase in net profit.

A year ago we decided to forgo paying a final dividend, preferring to re-invest the funds in our business. I am pleased to report that our caution paid off, and this year we were in a position to reinstate fully franked dividends, paying nine cents per share compared with two cents the previous year.

Customer focus

We believe our designer label, Liz Jordan, which is exclusively at NONI B, has been successful in attracting a broader range of customers to our stores. Our NONI B label has also been updated to reflect the fashions that our traditional customers want. Many women now appreciate that we offer a fit and shape that suit them, as well as exceptional style, quality, service and value.

Innovation

We recognise that we need new ideas and that all our people are capable of helping us improve. We therefore introduced specific training for managers on how to encourage innovation as well as in-house training that gives our sales people externally recognised qualifications. As a symbol of the importance we place on new ways of thinking, we offered an award for innovation and reviewed all our systems to facilitate suggestions that would help us improve everything we do.

The Chairman’s Award for Innovation “anything that improves anything” is now an annual highlight on NONI B’s calendar. Above is a photograph of this year’s winner, Fiona Walsh, whom I congratulate for developing in her own time a new approach aimed at improving our stock control.

Diversity

New reporting regulations for ASX companies are being introduced to encourage companies to introduce diversity at all levels of the organisation. We believe diversity is very important in enhancing our ability to make the best decisions, and our board charter already states that the composition of the board should reflect diversity in skills, experience, age and gender. Currently 40 per cent of both board and executive committee members are women, including Ann Phillips who was recently promoted to the role of chief financial officer and company secretary.

All our people can justifiably be proud of their efforts in 2009-10 in steering our company through challenging conditions. I particularly thank our managers and my fellow directors, whose passion about providing every customer with a great shopping experience makes NONI B a rewarding place to work. I also thank our shareholders, who have supported us through the year.

Outlook

Our sales staff have viewed our summer ranges and believe they are the best we have offered. We are a much more competitive retailer with a strong customer focus. As a result, although the economic environment is still uncertain, we are confident we have a solid business that will rebound as consumer confidence improves.

Lynn Wood
Chairman

Image above: Chairman’s Award for Innovation (Lynn Wood and Fiona Walsh).