DuluxGroup Slips Despite Reporting Full Year Profit Growth

  • Nov 14, 2018 AEDT
  • Team Kalkine
DuluxGroup Slips Despite Reporting Full Year Profit Growth

DuluxGroup Limited (ASX: DLX), the leading manufacturer and marketer of premium decorative paints has reported its full year result on November 14, 2018. DLX made an announcement for its full year investor presentation that included group and business performance along with 2019 outlook of the company.

In line with its strategy, DLX remained focus on three key zones in the year 2018. Firstly, there was focus on other home improvement business, along with focus on further opportunities towards the improvement of revenue growth and EBIT margins. Secondly, the group focused on extensions of granular product range in resilient markets; and lastly on off shore transfer of specialty product portfolio and associated capabilities.

DLX posted 5.4% increase in NPAT (net profit after tax) up to $150.7m for the year ended September 30, 2018, as compared to the FY17. 3.3% rise in the sales revenue up to $1.84 billion was recorded in FY18. The sales revenue figure excluded the divestment of China coatings business which showed revenue growth of 4.5. 5% rise in Earnings before interest, tax, depreciation and amortization (EBITDA) up to $257.7 million in FY18 was noted. Earnings before interest and tax (EBIT) grew by 4.2% to $223.2 million which was backed by strong results posted across all Australian and New Zealand business segments which were driven by the strong performance from DLX ANZ business which is 70% contributor in the group business. The strong performance of ANZ business led to growth in sales revenue which showed 4.8% increment and 4.7% rise in EBIT up to $7.8m, with an EBIT margin maintained at 17.6%. 4.7% growth in EBIT up to $3.1m was noticed under DLX group’s other ANZ segments- Selleys and Parchem ANZ, B&D Group and Lincoln Sentry. 5.3% fall in EBIT up to $0.6m was recorded under other business segment. Growth in Yates and PNG was more than offset by investment in DuluxGroup’s UK business and Indonesian joint venture.

Final fully franked dividend declaration of 14 cents per share by the Board took the full year dividend to 28 cents per share, representing growth of 5.7% in FY18 as compared to previous year and payout ratio on NPAT at 72%.

The company has presented its business performance outlook for 2019. Management expects leading market indicators for the key markets to remain more or less positive. Then, Existing Home segment which contributes almost two thirds of group revenue is expected to show profitable and resilient growth. Supportive comments on GDP from Reserve Bank, low interest rate and low unemployment levels can help the group. New Housing which contributes around 15% to the group revenue, will encounter moderate approvals in FY19 and is expected to remain in line with the FY18 levels.

Commercial & Engineering segment which contributes around 15% of the group revenue, will have non –residential construction posting strong growth while engineering construction and maintenance segment may remain flat. Management expects NPAT in 2019 to be higher than 2018 which was recorded at $150.7m.

Despite a decent result, the scrip slipped slightly and traded at the levels of $7.39 on November 14, 2018.


Disclaimer

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkinemedia.com and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.

 

 

All pictures are copyright to their respective owner(s).Kalkinemedia.com does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.

 

There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

CLICK HERE FOR YOUR FREE REPORT!
   
x
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK