GUD Holdings announce a 21% slump in net profit for H2 2012, blamed on a fall in consumer products including Sunbeam
Sales in consumer products declined 15% to $100 million with brand Sunbeam appliance a major contributor due to the demise of Retravision and competition from cheap European brands making inroads to the Aussie market, Gud Holdings, whose business includes electrical appliances and industrial products, said in a statement.
Consumer Products underlying earnings fell 38% to $11.9 million.
Sunbeam retained its local market leadership but was forced to lower pricing to remain competitive. Oates cleaning pruducts also fell in H2.
This weak result in Consumer Products was partially compensated by strong growth from Dexion business in Industrial Products division. Total group sales grew by 1% to $311.8 m for the half year ended 31 December 2012.
Underlying earnings EBIT also slipped 16% to $32.7 million, in line with the guidance provided at the AGM in November.
The absence of the Breville dividend of $1.8 million – Gud sold its near 20% stake in the appliance brand last year – was also blamed on the fall in revenue.
“During the half we experienced challenging trading conditions in our consumer businesses,” said Managing Director Ian Campbell said.
“The collapse of Retravision, proliferation of brands and the further growth of trade and house brands have all contributed to the Consumer Product’s disappointing result.”
The consumer division is now undergoing a major cost program “to align the cost base with the competitive situation”, pursuing offshore alliances, revising the product development program “to combat brand proliferation.”
“The Consumer business will remain under pressure in the second half, while we introduce our strategic initiatives to strengthen Sunbeam’s financial performance,” Mr Campbell said.
“We expect that trading conditions across most of the sectors we operate in will remain highly competitive.”
“GUD remains in a strong financial position and continues to seek acquisition opportunities to drive future growth.”
An interim dividend of 26 cents per share fully franked (4c fall) will be paid on 6th March together with the special cash dividend of 10 cents per share fully franked.
Shares fell 0.39% to $8.21 today.