2020-21 turned out to be a strong year for GUD Holdings, with total revenue, profit, and dividends all rising.
Despite the solid performance, GUD directors declined to provide forward guidance due to the uncertainty around the coronavirus lockdowns.
“Given the recent and more widespread COVID lockdowns with uncertain duration, the demand environment is too dynamic to provide reliable full year guidance,” CEO, Graeme Whickman said in the statement to the ASX.
“We expect to provide a further update at the annual meeting on October 29.
Shareholders will be looking for guidance on whether the company can repeat what turned out to be a far better than result by the end of June than when the year started in July 2020.
Final dividend was boosted to a fully-franked 32 cents a share – up from 12 cents last year (and cut by the company as a means of preserving cash in the then threatening situation).
Interim dividend was a steady 25 cents a share, making a total for 2020-21 of 57 cents a share against 37 cents a share.
The 57 cents per share was also one cent above the 2018-19 pre-Covid payout.
That was after a solid performance by its car parts division helped offset a challenging time for its Davey Water business.
GUD sells automotive products, pumps, pool and spa systems in Australia, New Zealand and France – said strong post-lockdown trade helped produce a 27.2% lift in full-year revenue to $557 million.
Earnings before interest and tax rose 31.1% to $97.4 million and net profit climbed 39.6% to $61 million, slightly lower than the $63 million forecast by the market.
This included JobKeeper receipts of $2.8 million, broadly in line with prior year, and more than offset by employee care and financial support programs and higher COVID‐19 operating costs.
“The financial year has been very demanding but ultimately pleasing,” Mr Whickman said.
“We navigated well through a broad range of COVID‐19 related challenges.
Davey Water experienced a particularly challenging year. While overall sales were up on the previous corresponding period due to growth in the ANZ markets, COVID‐19 impacts occurred at several levels which materially deteriorated overall profitability.
A strong automotive business performance saw revenue growth of 34.1%, with all businesses contributing to this growth.
As encouraging as all this was, GUD shares failed to hold recent gains and the shares dropped 3.3% to $11.70.
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We know that 2020-21 has been very good for Bunnings, the hardware giant owned by Wesfarmers.
Despite the continuing infections and lockdowns in some states by Covid and now its Delta variant, Bunnings has ridden out these disruptions, which in turn has been great news for its biggest landlord, the BWP Trust which reported a solid performance for the year to June on Wednesday.
BWP Trust maintained its payout at the previous year’s level after profit rose 25% and the value of its portfolio increased by 6%.
Final distribution was set at 9.27 cents a security, taking the full year payout to steady 18.36 cents a security.
For the year ended 30 June 2021, the trust’s property portfolio increased by $149.2 million, which it said reflected the ongoing attractiveness of Bunnings Warehouse properties to investors.
“The trust made good progress in improving Bunnings Warehouse properties and repositioning ex-Bunnings properties in the portfolio during the year,” BWP told investors in the statement to the ASX
Total profit was up 24.9% to $263.1 million, even after revenue dipped for the year.
The Trust also has leases with a small number of tenants such as gym operators which were subject to COVID-19 closure by State governments for periods of time during the year.
Rent abatement totalling $473,571 were granted for the year to June 2021. The Trust said it received 99.6% of rent due for the year, taking into account COVID-19 impacts.
“Net profit before revaluation gains for the year ended 30 June 2021 was $114 million, a 3.0 per cent reduction from the prior financial year,” The company said on Wednesday.
“This reflects the one-off impact of deposit payments forfeited by prospective purchasers of BWP-owned properties that resulted in a higher net profit in the 2020 financial year.
“For the year ended 30 June 2021, BWP reported a full-year ordinary distribution of 18.29 cents per unit, the same as reported for the previous year. Capital profits were utilised to offset the lower net profit to maintain the same distribution.”
Investors gave the result a modest thumbs down with the price of the securities falling more than 2% to $4.01
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Meanwhile lenders mortgage insurance provider (LMI) Genworth Mortgage Insurance Australia will resume paying a dividend for the first time since the coronavirus pandemic struck, as it rode the housing boom and customer defaults were kept low because of schemes to help mortgagees defer repayments during the lockdowns of the past few months.
The company provides insurance for banks where borrowers have loan to valuation ratios above 80% (in most cases).
Genworth reported a statutory profit of $59.4 million for the half year to June, after reporting a $90 million loss in the same period last year.
The company said it had experienced low levels of mortgage delinquency, in part due to banks’ support schemes for struggling customers.
After freezing dividends in the last two halves, it will make a 5 cents per share distribution to shareholders, which will be unfranked.
“Genworth has delivered a pleasing first half result, with a return to profit, ongoing top line volume growth and consistent customer service delivery, alongside a benign claims experience,” CEO Pauline Blight-Johnston said.
“The result reflects the improved economy, housing market appreciation and low interest rates experienced during the half. Performance was also supported by operational initiatives implemented last year in response to the new operating environment created by COVID-19.”
Gross written premium rose 21.1% to $289.7 million, as the rebound in mortgage lending helped fuel growth in new insurance written. It said growth in loans with high loan-to-valuation ratios – which are those most likely to require mortgage insurance – was “strong.”
At the same time it said net claims fell 51.2% to $49.3 million compared with the same half last year.
Genworth said it had renewed its contract to provide mortgage insurance to a major non-bank during the half. It will bid to extend an agreement to provide mortgage insurance to Commonwealth Bank beyond 2022, when its current deal ends.
Investors loved this result and sent the shares up 7.5% to $2.28. That’s the same price as that reached in late March after the sale of the US parent’s entire stake in the Australian company to local investors.
