GWA SPOUTS $24M HALF-YEAR PROFIT

Written on the 16 February 2016

GWA SPOUTS $24M HALF-YEAR PROFIT

CORPORATE restructuring has flowed on to GWA Group's (ASX:GWA) interim results, with the household fittings supplier returning to profit.

The Brisbane-based business posted a net profit of $24.2 million in the first half, compared to a loss of $10.6 million in the previous period.

A renewed focus on its bathrooms and kitchens and door and access systems businesses led to 4 per cent lift in revenue to $220.2 million. Market share improved in the second quarter with the launch of new products.

Corporate costs were down 9 per cent, after restructuring the business to deliver a more effective operational model and supply chain efficiencies.

GWA CEO Tim Salt says solid performance in the second quarter will provide a strong platform for growth in the second half.

"We are working to improve market share across our core product categories, through the launch of new products and working closely with our key customers," Salt says.

"In the meantime, we are seeing the benefits of the restructuring we announced in June 2015 flow through in terms of lower costs."

Salt says GWA monitors the exchange rate closely to mitigate fluctuation in the business, with 75 per cent of foreign exchange exposure hedged for the remainder of FY16.

Price increases will take effect next month to cover unhedged exposure.

"We expect the market to grow in the second half albeit more slowly, off a high base, than in first half FY16," he says.

"Based on current market conditions, we expect second half EBIT will be higher than 1HFY16 while operating cash flow will benefit from a reduction in working capital."

GWA has bought back 11.2 million shares under the on-market share buyback program since December last year.

The board has declared an interim dividend of 7 cents per share to be paid on April 5.

 


Latest News

PROFIT BOOST FORECAST AT VILLA WORLD

VILLA World has forecast profit growth of 5 per cent in the first half of FY17 in an earnings guidance released to th...

WP CURVE SOLD TO GODADDY

NASDAQ-listed tech company GoDaddy has bought Gold Coast's WP Curve for an undisclosed sum.

The subscription-b...

BOARD SHAKE-UP TAKES OUT SURFSTITCH FOUNDER

ONLINE actionwear retailer SurfStitch Group (ASX: SRF) has announced a major board shake-up in a move that effectivel...

ORIGIN TO DIVEST UPSTREAM OIL AND GAS BUSINESS

ORIGIN Energy will spin off its upstream oil and gas business in an as-yet unpriced IPO.

It will allow the Sydney-...

Related News

HOW MCDONALD'S AUSTRALIA REDISCOVERED ITS INNOVATIVE SPIRIT

MCDONALD'S is such a ubiquitous part of the Australian landscape today that it is easy to forget how it change...

JB HI-FI IS THE GOOD GUY IN $870 MILLION ACQUISITION

ELECTRONICS giant JB Hi-Fi has formally completed its $870 million acquisition of home appliance chain The Good Gu...

ACCC ACTS AGAINST MERITON'S RIGGED REVIEWS

MERITON Property Services is under fire from Australia's main consumer watchdog, after it allegedly engaged in mi...

ACCC FIRES WARNING SHOT TO IVF PROVIDERS

IVF clinics have been put on notice by consumer watchdog, the Australian Competition and Consumer Commission (ACCC...

Contact us

Email News Update Sign Up Contact Details

Subscribe to our mailing list

* indicates required
Email Format

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter