The home building and renovation boom paid off nicely for Dulux (DLX), the paint and building products group, with a solid rise in full year profit and a near 10% increase in total dividend payout for the year.
And the company is expecting more of the same in 2015-16.
The company, whose brands include Selleys, Yates and Dulux, lifted net profit 7.9% to $112.8 million from $104.5 million in the year to September 30.
Excluding restructuring costs, underlying profit was $124.7 million.
DuluxGroup declared a final dividend of 11.5c a share. That brought the total payout for the year to 22.5c a share, up 9.8% on a 2013-14.
Dulux says conditions in its core home renovation market remain positive and it expects to lift its profit above that $124.7 million figure in the year to September 30, 2016.
"Lead market indicators for our key markets remain largely positive, particularly in our core home renovation markets which account for ~65% of group revenue,” the company said in yesterday’s statement.
DLX 1Y – Dulux FY profit up 7.9%
Managing director Patrick Houlihan said the result was driven by profitable sales growth in most of DuluxGroup’s businesses, in generally positive market conditions.
"Solid profit growth was underpinned by the continued strong performance of our Australian Paints & Coatings business, Selleys and Yates," he said.
“The businesses acquired from Alesco are beginning to benefit from important transformation initiatives, and we were pleased to see improvement in the second half, particularly in B&D.
“Profit growth has been delivered while continuing to invest in the business fundamentals of brands, innovation and customer service. A number of new product break-throughs were launched, supported by strong marketing investment and an even tighter alignment with our retail and trade customers.
"Most significantly, Dulux launched the new flagship Wash & Wear range under the banner of the ‘best we’ve ever made’.
“At the same time we are investing for longer term growth, with the announcement of the construction of our new state-of-the-art, water-based paint factory in Melbourne and the new Dulux and Selleys distribution centre in Sydney.
"These significant investments in our manufacturing and supply chain will reduce our operating cost base, increase our capability, and will support ongoing growth in our core ANZ businesses for decades to come.
“We also acquired the Porter’s decorative paints business during the year, as a means of expanding our specialty architectural and design offer domestically and potentially offshore,” he said.
Sales revenue increased 4.7% to $1.7 billion and earnings before interest and tax (EBIT), excluding non-recurring items was $192.4 million, up 4.7% on the prior year.
Dulux shares rose 1.5% to $6.05.
