DuluxGroup says net profit for the company’s first year as a standalone entity was $61.289 million in the year to September 2010 and it expects profit to grow further in 2011 year.
The results do not reflect the complete 12 months of results of the company’s operations, DuluxGroup said in yesterday’s statement to the ASX.
DuluxGroup is the newly-listed paint, adhesives and garden care products supplier that was demerged from its parent, the explosives and chemicals group Orica in July.
Orica reported its full year figures yesterday (see above report).
DuluxGroup (DLX) declared a final dividend of 3c per share, fully franked.
On a pro-forma basis, DuluxGroup said net profit in fiscal 2010 before one-off demerger costs was $71.5 million and $68.7 million after demerger costs.
The company said that on a like-for-like comparison with 2009 (i.e. before one-off demerger costs and the new costs associated with becoming a standalone listed company), pro forma revenue, earnings before interest and tax (EBIT) and operating cash flow all improved:
- Pro forma sales revenue increased 2% to $963.9 million;
- Pro forma EBIT increased 6% to a record $136.5 million; and
- Pro forma operating cash flow improved by 7% to $162.3 million.
DuluxGroup Managing Director & CEO Patrick Houlihan said in the statement "The record result in mixed market conditions reinforced the enduring strength of the strategic leadership position that DuluxGroup has carved out and continues to build upon, combined with an ongoing focus on tight financial management.
“To deliver record EBIT when our businesses continued to face quite challenging market conditions is very pleasing,” he said.
DuluxGroup forecast profit to grow further in fiscal 2011.
"We expect 2011 DuluxGroup net profit after tax (before individually material items) to be higher than $71.5 million, being the 2010 pro-forma net profit after tax before one-off demerger costs, subject to economic conditions," the company said in a statement.
Mr Houlihan said "In 2011, we will continue to build upon that capability to grow DuluxGroup’s market leading positions in Australia, New Zealand and PNG and tailor those capabilities to capture the long term growth we see ahead in DuluxGroup’s targeted segments in the emerging high growth markets of Asia."
Pro-forma sales revenue grew 2% to $963.9 million, DuluxGroup said.
DuluxGroup said EBIT grew in all but one of the company’s operating segments, with Paints New Zealand suffering a 9.6% fall in earnings to $91.9 million on a pro forma basis.
DuluxGroup said Paints New Zealand had been affected by translation effects of the strong Australian dollar and costs related to the upgrade of a paint factory there.
The Paints Australia, Selleys Yates, Offshore and Other as well as corporate costs all reported improved EBIT on a pro-forma basis.
Paints Australia, the company’s largest contributor to earnings, posted pro-forma EBIT of $91.9 million, up 5.6% from the 2009 year.
The share price rose 3c to $2.73, then lost the gain in the afternoon to end the day steady on $2.70.
The company’s ability to grow will be constrained by the tougher outlook for the housing and renovations sector in the next year, especially after last week’s rate rise from the RBA.
