Unlike directors of Incitec Pivot (IPL) on Tuesday, directors of DuluxGroup (DLX) yesterday lifted final dividend payout because they can see a higher profit for the current financial year.
IPL directors boosted their final dividend 25%, despite warning of flat to weaker results from key markets in Australia and offshore in the coming year.
But Dulux directors have forecast a profit higher than the $111.9 million after tax result reported yesterday.
The company rode the building and renovation boom, and benefited from the integration and contribution of the assets of Alesco Corporation, which was taken over nearly two years ago.
As a result the board declared a final dividend of 10.5c per share, fully franked, from 9.5c previously.
That took total dividend for the year to 20.5c per share, compared with 17.5c previously, an increase of 17.1%, and a high payout ration of 70.2% of net after tax profit before one-off items.
Dulux’s net profit after one-offs rose 39.4% to $104.528 million in the year to September 30, from $74.998 million.
Excluding non-recurring items of $7.4 million, which were partly due to integration costs and an impairment charge relating to its business in China, net profit was $111.9 million, up 21.4%.
Dulux said it expects its fiscal 2015 net profit will be higher than $111.9 million.
DLX YTD – Dulux lifts profit 39%
Managing Director Patrick Houlihan said the result was driven by strong profitable sales growth in strengthening Australian and New Zealand markets, the contribution of a full 12 months of Alesco earnings and effective margin improvement initiatives.
“The business has delivered more than 20% profit growth, underpinned by strong financial discipline. At the same time we continued to increase our investment in marketing, innovation and customer service, and DuluxGroup is well placed for ongoing growth,” he said.
Sales revenue increased 8.5% to $1.6 billion, assisted by a full 12 months of Alesco earnings compared with 10 months in 2013. Including a full 12 months ‘pro forma’ Alesco contribution in 2013, sales grew 3.6%.
Earnings before interest and tax (EBIT), excluding non-recurring items, was $183.8 million, an increase of 19.4% on the prior year, and an increase of 12% on a pro forma basis.
Net debt to EBITDA further reduced from $1.98 million in 2013 to $1.53 million, assisted by strong cash generation.
Dulux shares eased two cents to $5.59.
