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HOMEWARES supplier GWA International Limited (GWT) has sold its European business Wisa Beheer for $17 million.
Managing director Peter Crowley says the move is part of a strategy to shed non-core assets, but the write-down will appear as a $3.5 million loss after tax on its balance sheet.
“We bought it in 1999 in the view that it could be part of our supply chain with Australia and more broadly in Europe, but it’s been a challenging market for some time,” he says.
“We expanded our factories here in Australia in the interim, we have supply arrangements with Asia, so with the European business it got to the stage where we asked, why are we here?
“We’re expecting very good profits this year and we’ve got a very strong balance sheet, but we’ll use the 11.7 million euros to reduce net debt and ultimately for acquisitions as they arise.”
Crowley says the decision has little to do with the European debt crisis because the Netherlands-based company has faced difficult conditions for some time.
“With limited growth prospects and an uncertain outlook in Europe, Wisa is no longer a core business and is more suited to local ownership.
“This sale is consistent with our strategy to divest non-core businesses and use the sale proceeds to focus on our building fixtures and fittings business.”
GWT shares rose 0.3 per cent today to $3.11.
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