Paint maker Dulux (DLX) has lifted profit 15.6% to $139.4 million for the year to September 30 and expects to be reporting another gain for the 2016-17 financial year.
Sales revenue increased 1.7% to $1.72 billion, with otherwise solid growth impacted by weakish retail markets in Australia and New Zealand and the fall in the Australian resources infrastructure and Papua New Guinea markets. Final dividend of 12.5 cents per share, fully franked, up from 11.5 cents, making a full year payout of 24 cents, up from 22.5 cents.
Earnings before interest and tax (EBIT) rose 4.5% to $201.1 million, excluding non-recurring items in the prior year. Taking those into account, profit was up a more sedate 4.6%.
“Our core existing home renovation markets, which account for about 65 per cent of group revenue, are expected to continue providing resilient, profitable growth,” the company said in a statement on Tuesday.
CEO, Patrick Houlihan said yesterday approvals in the housing market – new housing generates about 15% of group revenue – had peaked, but because of the lag between approvals and completions, demand for paints, adhesives and other home care products is expected to remain strong.
And subject to economic conditions and excluding non-recurring items, Dulux expects net profit in 2017 to be higher that in 2015-16.
Mr Houlihan said the company does not expect any material impact in 2017 from the closure of the Masters "big box" hardware stores.
He said that in fiscal 2016, underlying earnings had been solid despite some short-term problems.
Those headwinds included the closure of the Masters and the exit of Dulux brands from Mitre 10 in New Zealand; a fall in demand from the Australian engineering construction market; and economic weakness in Papua New Guinea.
The Dulux, Selleys and Yates businesses, which generate two-thirds of Dulux’s revenue, grew earnings by 6.2%.
But earnings from the group’s garage doors and openers business fell by 5.8%, reflecting one-off costs and market weakness in the second half.
Shares in DuluxGroup fell 2.3% yesterday to $6.19.
