GWA EARNINGS RISE THROUGH "SINGLE-MINDED FOCUS"
Written on the 17 February 2015
FOLLOWING a year of business shakeup, GWA Group (ASX: GWA) has seen an increase in earnings but a decrease in profit.
The supplier of fixtures and fittings to households and commercial premises announced a five per cent increase in EBIT for continuing operations to $33.1 million for the half year to December 2014.
The company expects full year EBIT to be around $70 million.
Net loss after tax for the past half year was reported as $12.8 million, affected by a one-off $36.7 million restructuring and significant items charge, which also means the company has retained insufficient earnings to pay an interim dividend to shareholders.
Managing director Peter Crowley says that he expects exiting non-core business in the past year and improvement in dwelling completion activity to pay off for the company in the near future.
"The focus for the first half was executing our strategy to divest the Dux and Brivis non-core businesses and the exit of manufacturing in the Bathrooms & Kitchens division," says Crowley.
"With the successful completion of those tasks, our total focus will move to growing the core divisions of Bathrooms & Kitchens and Door & Access Systems.
"Dwelling completion activity - the stage in the building cycle where GWA products are typically sold - continues to improve and we expect a stronger second half performance."
Sales in GWA's core Bathrooms & Kitchens division increased six per cent over the half year period, but the closure of its Wetherill Park manufacturing is noted to have affected earnings for the period.
Conversely, the Doors & Access Systems business declined four per cent.
Crowley says the Doors & Access Systems result is feeling a longer than expected recovery following a transition to an overseas supplier last year.
Crowley says his focus for the company is "single-minded" going forward.
"Our single-minded focus is on ensuring our two divisions take advantage of the improving market," he says.
"We will continue to execute our plans so that the core Bathrooms & Kitchens business continues its positive growth momentum.
"We will also ensure the Gainsborough business regains the ground it lost following last year's supply disruption, and continue to drive Gliderol for revenue growth and a return to profitability.
"Our financial metrics remain strong, our business is more focussed and we are aligning our organisational structures and introducing new capabilities that will allow the Group to deliver improved shareholder returns."