Consumer and industrial products supplier GUD Holdings expects a solid financial performance in the 2012 financial year despite difficult conditions in the Australian retail sector.
GUD’s brands include Sunbeam household electrical goods, Davey water pumps, Wesfil automotive filters, Oates cleaning products, and Dexion storage products.
GUD on Thursday booked a full year net profit of $39.6 million, down 14.5 per cent on the prior year.
The result included costs of $12.3 million associated with the $83.8 million acquisition of Dexion in September 2010 and the restructuring of Dexion and GUD’s water products business.
“We are expecting a solid financial performance in 2012, underpinned by the strength of GUD’s brand portfolio,” GUD managing director Ian Campbell said.
“Trading conditions are predicted to remain difficult in the Australian retail sector, and this will influence both Sunbeam and Oates.”
Underlying net profit after tax – that is, before the acquisition and restructuring charges – rose six per cent to a record $49 million.
GUD’s underlying results were boosted by the addition of Dexion, the strength of the Australian dollar, and the company’s ability to negotiate lower-than-expected cost increases from suppliers.
GUD is primarily an importer of goods and many of its products, including all of its consumer goods, are made in China.
Mr Campbell said the retail trading environment had been tough for a long time now, but GUD had managed its costs and continued to promote products strongly.
“We’ve been through a couple of cycles not as bad as this, but maintaining brand leadership and promoting the attributes of the brand has stood us in good stead,” he said.
“Provided we’re quick to change our strategy if market conditions change, I think we’ll be just as strong at the end of this year as we were at the end of last year, albeit with difficult trading conditions.”
Mr Campbell said the high Australian dollar had helped the company, and at its current level of around $US1.10, would help the company some more.
He said his main concern for 2012 was “general uncertainty”, including subdued consumer sentiment, any potential fall in employment and continued worries over overseas factors such as debt levels in parts of Europe.
Shares in GUD were two cents lower at $8.49.
The water business had been affected by wet weather all down the east coast, floods over Christmas, a lack of bushfires over summer, and cooler summer conditions which had affected demand for pool and spa products.
The high Australian dollar had also hurt exports of water products. GUD expects the water products business to recover over 2012 as weather conditions return to normal. The company expects that an improvement in margins generated by the restructuring of Dexion will be a key driver of performance in 2012.
GUD declared a final dividend of 35 cents per share, up from 34 cents in the prior corresponding period.
AAP
