Ann: 2018 AGM Presentation, page-5

Yes CS is performing well, although after a disappointing result in FY17 (see slide 24 of the Morgans Qld presentation, 10/10/2018). Neverthless, all credit to them for picking up major infrastructure projects in Brisbane and Sydney. CS however is classified as its own ‘Portfolio’ company (specialising in geotechnical testing) and is not part of Cardno’s APAC group (who provide engineering and environmental services to the urban and transport sectors).

APAC has the reverse problem to CS. Rather than improving, its performance has fallen off a cliff - as evident by the last four half-yearly results on slide 18 of the Morgans Qld presentation.

APAC North has struggled in recent years and South has propped them up. Unfortunately, South now has problems.

APAC South has been a key contributor to Cardno’s otherwise mediocre bottom line over the past 3 or 4 years, helped by Sydney’s property and infrastructure booms, but they’ve hit turbulence. They’ve not rewarded/incentivised entrepreneurial staff within APAC South, so many of the work winners have left. That’s one of the key reasons why they haven’t been able to replace large infrastructure projects in run-off phase with new ones. The profits that should have been used for incentivising/ retaining rain makers have been used instead to pay back debt on dud acquisitions authorised by the clowns who previously made up the pre-Crescent Board. There are numerous cases in APAC South over the past couple of years of young go-getters who have left in frustration and set up their own enterprises competing with Cardno.

It’s a shame that the train wreck left behind by the clowns is still hampering Cardno reaching its full potential.