Introducing Frontline Defence Services -

The Army and Air Force Canteen Service, trading as Frontline Defence Services, was established in 1981, after a major review of previous organisations and is a Commonwealth Statutory Authority.

The Board believes the enabling regulations, which were formulated over 20 years ago to establish Frontline can be streamlined to allow our business to become more relevant to the entire Defence family. Such proposals to amend the regulations are currently with the Minister. The continuing challenge of Frontline is to move with the dynamics of Defence retailing industry and the community i.e. adopting a strong customer focus, developing staff and introducing quality systems to support and develop the business. Frontline is in the throes of reinventing itself to earn the name of the Defence family’s preferred retailer of choice for convenience shopping and specialty products and in doing so being a progressive retailer with a first class offer and state-of-the-art delivery. The Board is working hard to continue this restructure, that commenced last year, to explore and develop new business opportunities to the broader Defence Family, to extract the benefits of a national approach, particularly in dealings with key suppliers.

The Board is also striving to improve the facilities from which the business operates at Defence installations to a commercial standard, within its own means for fit-out and with the Department for the facilities themselves – which are a Commonwealth responsibility.

The value to the Australian Defence Community delivered by Frontline increased this year by $0.4m to $9.1m. Total revenue was $43.6m, and over $50m when licensed business is taken into account. Assets are highly convertible and valued at $14.1m.

Highlights of 2003 and Annual Report (tabled 5th November 2003)
Michael A Hume, Managing Director - Frontline Defence Services

The Financial Year 2002/03 has been a very significant year for everyone involved in Frontline and its operations. The agility of our people has been tested to their limits. The change in the Australian Defence Force disposition, trends and social attitude and the introduction of commercial contractors has significantly impacted on our Business.


2002/03 Major Highlights
• Domestic sales (directly operated locations) up by $1.2m (3.7%) despite a customer reduction in excess of 8%
• Major growth in both sales and profitability at our new concept stores at Enoggera and Laverton
• Successful implementation of new financial business system
• Realisation of relocation savings from Melbourne to Brisbane
• Cost control measures introduced in early 2003
• Continued strong growth in Pay Plan with sales up in excess of 4% versus last year
• Distributions of $0.36m

Despite the significant highlights the profit performance was disappointing with a net trading loss of $701k.

Significant one off costs of $1.17m impacted our performance:
• Down turn in total overseas earnings (closure of East Timor Joint Venture Operation in May 2003) with profits down $0.41m
• Bad debts (an accumulation over the past 5 years) of $0.16m
• Board decision to bring to account development costs of $0.15m of E-commerce solutions
• An increase of $0.45m in cross subsidisation of smaller non profitable basis

Growth in businesses can be achieved in two ways – generic growth or by acquisition. Acquisition is denied to Frontline and therefore generic growth is the only avenue available to us. However with a static or declining customer base this is difficult.

The company has worked hard in developing a way forward that will be centered on the strategic rationalisation and improvement of the network. The implementation plan with the full support of our major stakeholders is being introduced with the full co-operation of base command.

Long term sustainability will be achieved via:

1. Investment:
Significant Investment is required in the business. The Board have before government and major stakeholders an investment/support plan. Subject to approval a 4 year Investment program will be implemented involving:
• Point of Sales and back Office implementation
• Roll Out of “New Retail Store” formats
• Image & Signage
• C Store – Image & Shelving
• Support equipment to exercise and operations

2. Cost Reduction
• Real Wage reduction as a result of efficiency measures in Point of Sale and the Investment in New Format stores & equipment
• Control of site expenditure as a result of rationalisation and efficiency measures

3. Sales Growth over 4 years in
• E-Commerce www.frontlineonline.com.au
• New Retail store formats
• Pay Plan Sales
• Introduction of Liquor Barns

4. Gross Profit Improvement
• Compliance and better controls on price management at store level with POS/BOS
• Waste Control using POS/BOS
• Rationalisation and a shift in sales mix to high margin categories

We all remain committed to make your organisation work for you. This will be better achieved with the cooperation of all stakeholders working together. We at Frontline look forward to working with all our customers and stakeholders in the coming months.

This modern retail centre will include a completely new retail offer trading at convenient hours 7 days per week servicing “All Ranks” under one roof. Whether you want a quick snack, sit down meal, pick up the paper, browse the electrical offer or take home a six pack, all of these activities are catered for you and your family at “Tom’s Central”.

· Subway
· Tom’s Café – Merlo Coffee and fine food
· Tom’s Electrical Store – Pay Plan
· Liquor Barn and Convenience Store

Frontline is delighted to inform you that the Board of Directors has declared a distribution of $300,000 for the year ended June 2004.

This amount is to be made available for redemption in two instalments:

• $200,000 from November 22nd 2004
• $100,000 from February 1st 2005

The Board Distribution Policy (supported by both Chief of Army and Chief Air Force) is to ensure that all bases, where Frontline has Direct Operations, receive an allocation of the total distribution, ensuring that all soldiers and airmen receive a distribution regardless of base size and population. The 2004 $300,000 disbursement equates to a payment of $10.40 per soldier/airman.

I think it is important to reiterate that in addition to providing competitive pricing we also provide distributions ($6.5m since 1998) which no other operator provides.

Looking towards an exciting 2005 Frontline has secured an agreement with SUBWAY ® to open a series of SUBWAY ® restaurants on selected bases around Australia. In addition to the Subway offer, Frontline has also secured an agreement with Merlo Coffee. These important initiatives will compliment our existing retail offer.
The first SUBWAY ® locations will be at Lavarack, Puckapunyal and Robertson Army Barracks. Discussions are in progress with Subway regarding additional operations at Amberley, Richmond, Enoggera and Holsworthy in the 2nd half of 2005. This coupled with new revenue-generating initiatives and cost-cutting programs as indicated below will continue to demonstrate -

“Frontline on the Move”.
• Launch of Frontline Online, the new internet sales site almost $1m sales Year to date
• Installed Automatic teller machines at selected bases
• Preferred supplier agreement with Carlton United Beverages and Betta Electrical
• Rationalised several outlets, in consultation with Base Commanders
• Conducted and analysed customer surveys
• Approval, in conjunction with Defence, to refurbish and consolidate operations at Lavarack Barracks (Townsville)
• Independent pricing surveys completed, verifying Frontline’s pricing is well below competitors off base in liquor, food and convenience products.

Michael Hume
Managing Director

A working group formed to establish a DI(G) [Defence Instruction General]

Selected Members of Army, RAAF, Navy, CFO, CSIG, DPSA and FDS met 27 and 28 September to draft a DI(G) on Defence / Frontline requirements and relationship. Importantly the process reflects formally the understanding of Frontline as a Defence Entity and the identification of stakeholders and responsibilities. Work is still to be done to progress the draft and already in these initial stages the outlook is for a clearer definition for all parties.

We talk with Major Ann Sherren on Overseas operations

Major Ann Sherren - Officer Commanding 1 Joint Amenities Unit (1 JAU) met with Andrew Willliams - General Manager FDS today to discuss operations in East Timor and Solomon Islands.

The closure of East Timor (Saturday 15th May) is the culmination of an exercise that has provided many learning experiences for both FDS and Defence, from logistics to Retail training, the requirement of Standard Operating Procedures (SOP) through to definitions of Memorandum of Understanding (MOU).

1JAU has provided services re welfare and amenities in East Timor as well as the sale of class 6 goods and duty free for FDS. "Our role first and foremost is to look after our Aussie troops" Ann said "and provide some creature comforts of home like DVD's, TV's Satellite Dishes etc." A task that JAU have performed with consistent focus and on-time mangement.

The relationship between 1JAU and FDS is a win-win situation for both parties in any deployments in Australia or Overseas.

FDS thank all 1JAU staff for their commitment and dedication to getting the job done.

ADF say Thank You to Locally Employed Civilians for their support Friday 14th May 2004.


A function was held at Australian National Command Element East Timor (ASNCE - EM) to thank Locally Employed Civilians (LEC's) for their efforts and support of ADF over the deployment time in Dili.

Commander Australian Contingent (COMASC - EM) Col Wayne Fleming invited the LEC's and their immediate families to a 'Fair Dinkum' Aussie BBQ. Games, balloons, karaoke and a slide show were all part of the festivities on the night, and not to forget some ice cream for the children.

Col Fleming presented commemorative plaques to each of the LEC's and thanked them (with the assistance of a translator) and spoke of the friendships and trust that had developed over their time at ASNCE.

Col Fleming is pictured presenting a plaque to LEC Joaquim Da Silva Tilman.

The Frontline store operated by 1JAU closed Saturday 15th May after more than 4 years trading in BGR Dili.

The Frontline store had closed it's doors after more than 4 years of trading in East Timor. 1 Joint Amenities Unit (1JAU) staff have manned this operation as part of their duties since 1999 and have provided much needed services and facilities to Australian troops. A wide range of duty free goods have been made available to troops on deployment and the profits from this operation have been re-distributed in the form of welfare and amenities payments back to bases in Australia.

Frontline wishes to acknowledge and thank all the 1JAU staff that have participated in the successful operation over the years. The last 1JAU DET to operate the operation were :
WO2 MATT SEARLE - (Centre of picture)
CPL CHRIS SHIPLEY - (Left)
PTE JOHN BURGESS - (Right)
who progressed the closure of the store with a clear and professional plan. Thanks guys for a job well done.

Frontline supports Australian Services Australian Football Association through ongoing sponsorship of the 2004 season.


The Annual ANZAC footy match was played on Saturday 24 April as the curtain raiser to the Sydney Swans / Melbourne game at the Telstra Stadium.
The ADF All-Stars ran out winners against the Combined Emergency Services with a final score of
ADF 17 goals 9 behinds Total 111 points
CES 5 goals 3 behinds Total 33 points

The Frontline Defence Services Banner was proudly displayed in the middle of the playing field on each of the quarter time breaks in view of 50,000 + spectators looking on.

Pictured is Brig Brian Dawson AM,CSCL Land Headquarters Victoria Barracks
making presentation of the No 1. Jumper to FDS Outlet Manager Vic Barracks - Donna Boyle in recognition of the sponsorship dollars raised on the night.

Frontline helped the trainees at RAAF Wagga celebrate a not so ordinary day on Friday March 12. The 7am parade was a colourful show of brightly dyed hair to support the “shave for a cure” cause. A good time was had by all and we look forward to doing it again next year!

Frontline Contributes $16,207 to WLM Welfare

The Manager of the Williamtown Frontline outlet has donated over $16,000 to the Base Welfare Fund. The Acting Base Commander, Wing Commander Geoff Patchett said that the donation was a welcome boost to the fund that provided support for the Base sporting and recreational clubs. Wing Commander Patchett said that he was pleased that Williamtown Frontline continued to provide a significant contribution to Welfare.

"Our local manager Ms Leonie Sulcas is always open to suggestions on how the service could be improved and has recently extending trading hours to cater for living-in members wanting food and convenience times in the evening. "The store continues to receive good support from the base population and as long as that support continues Welfare will benefit". he said

The substantial contribution coincides with the Williamtown Store having been selected as the 2003 Outlet of the Year, as a result of its proven consistency in customer service performance levels....achievement of all budgets.....professional standards in all areas of Food Safety (HACCP) ... and exceptional teamwork...

The Manager of the Williamtown Store Ms Leonie Sulcas said that it was exciting to be selected out of all the Frontline outlets to be number one for the year and that it was a definite team effort to achieve the results.

RAAF Richmond receive Royalty Cheque

Frontline announced in Dec 03 an interim dividend to be returned to Bases in the form of Welfare and Amenities Payment. This was as a result of improved performance from Frontline operations during the second half 2003 against Budgetary Forecasts.

Wing Commander Wayne Knight - Base Commander RAAF Richmond is pictured during the Disbursement letter Presentation with Frontline Store Manager Mr Kym Boeck-Hopley.

RAAF Wagga receive Royalty Cheque

Frontline announced in Dec 03 an interim dividend to be returned to Bases in the form of Welfare and Amenities Payment. This was as a result of improved performance from Frontline operations during the second half 2003 against Budgetary Forecasts.

Wing Commander Graham Wren - Base Commander RAAF Wagga is pictured during the Disbursement letter Presentation with Frontline Store Manager Ms Geraldine Keir.

Puckapunyal receive Royalty Cheque

Frontline announced in Dec 03 an interim dividend to be returned to Bases in the form of Welfare and Amenities Payment. This was as a result of improved performance from Frontline operations during the second half 2003 against Budgetary Forecasts.

Brigadier Bowen - Base Commander Tobruk Barracks Puckapunyal is pictured (Centre)during the Disbursement letter Presentation with Frontline General Manager - Andrew Williams (left) and Store Manager Mr Steven Joseph (right).

RAAF East Sale receive Royalty Cheque

Frontline announced in Dec 03 an interim dividend to be returned to Bases in the form of Welfare and Amenities Payment. This was as a result of improved performance from Frontline operations during the second half 2003 against Budgetary Forecasts.

Pictured are Frontline Manager at East Sale Mrs Pat Hodges (left) presenting our cheque to the new Base Commander of RAAF Base East Sale Wing Commander Grant Murphy (Centre) and the outgoing Commander Wing Commander Vic Lewkowski (right).

Frontline Defence Services, Enoggera is pleased to offer you our new catering service.

All you need to do is pick items from the following lists and let us know when it is required. You can pick-up or we can deliver to you for no extra charge. You can also use our facilities in the Henry Dalziel Club where we will also open the bar if required. We guarantee freshness and the best possible service.

Please peruse the following and contact Frontline Defence Services at Enoggera on any of the following numbers: Liz Stewart – Manager, 3332 7945 … Karen Grey - Kitchen Superivsor, 3332 7945 … or just pop in to see us.


Afternoons or Evenings

Savoury - Your Choice Of Three
$5.00 Per Person

- Cocktail Spring rolls
- Dim Sims
- Wontons
- Shrimp Shaomai
- Wedges
- Chicken Dippens Sweet Chilli Or Sour Cream And Chives
- Gourmet Sandwiches
- Gourmet Rollups
- Mini Quiches
- Gourmet Pies
- Mini Dogs
- Fish Goujons
- Meatballs
- Devils on Horseback
- Antipasto Platter

Sweet - Your Choice Of Two
$2.50 Per Person

- Profiteroles
- Éclairs
- Cake … Carrot, Chocolate, Orange and Banana
- Fruit and Cheese Platter
- Mini Pavlovas

Morning Tea

Savoury - You Choose Any Three
$4.00 Per Person

- Mini Quiche
- Party Pies
- Sausage Rolls
- Gourmet Sandwiches
- Gourmet Rollups
- Vol Au Vents
- Jatz … Cheese Gherkin Kabana
- Fruit And Cheese Platter
- Dip And Crudities
- Muffin Pizzas

Sweet - Your Choice Of Two
$2.50 Per Person

- Éclairs
- Profiteroles
- Cake … Carrot, Chocolate, Orange And Banana
- Pikelets
- Scones
- Vanilla Slice
- Muffins
- Gingerbread
- Date loaf

The Outlet of the Year awarded to RAAF Williamtown

Mike Hume, Managing Director - FDS announced today (Thursday 4th December 2003) RAAF WILLIAMTOWN selected as the top performing Outlet of the Year. "..Williamtown has proven consistency throughout 2003 in customer service performance levels....achievement of all budgets.....professional standards in all areas of Food Safety (HACCP) ... and exceptional teamwork..." Mike told the group. Pictured is Mike presenting the Award to Ms Leonie Sulcas - Manager RAAF Williamtown Base. Leonie stated that it was exciting to be selected out of all the Frontline outlets to be number one for the year and that it was a definite team effort to achieve the results.

Congratulations to Leonie and all her Team .....Number One for 2003.!!!

Retail Manager NQ Erica Keam selected as Retail Manager of the Year for Frontline

Managing Director - FDS, Mike Hume announced today (Thursday 4th December 2003)the selection of the Retail Manager 2003 awarded to Ms Erica Keam.
Mike commented "....Erica was selected using a comprehensive model of criteria ranging from performance measures against various budgets, customer relationships, staff management and Base Command relationships to name but a few..."

Mike presenting Award to Erica is pictured

Congratulations Erica !!!