CORPORATE restructuring has flowed on to GWA Group's (ASX:GWA) interim results, with the household fittings supplier returning to profit.
The Brisbane-based business posted a net profit of $24.2 million in the first half, compared to a loss of $10.6 million in the previous period.
A renewed focus on its bathrooms and kitchens and door and access systems businesses led to 4 per cent lift in revenue to $220.2 million. Market share improved in the second quarter with the launch of new products.
Corporate costs were down 9 per cent, after restructuring the business to deliver a more effective operational model and supply chain efficiencies.
GWA CEO Tim Salt says solid performance in the second quarter will provide a strong platform for growth in the second half.
"We are working to improve market share across our core product categories, through the launch of new products and working closely with our key customers," Salt says.
"In the meantime, we are seeing the benefits of the restructuring we announced in June 2015 flow through in terms of lower costs."
Salt says GWA monitors the exchange rate closely to mitigate fluctuation in the business, with 75 per cent of foreign exchange exposure hedged for the remainder of FY16.
Price increases will take effect next month to cover unhedged exposure.
"We expect the market to grow in the second half albeit more slowly, off a high base, than in first half FY16," he says.
"Based on current market conditions, we expect second half EBIT will be higher than 1HFY16 while operating cash flow will benefit from a reduction in working capital."
GWA has bought back 11.2 million shares under the on-market share buyback program since December last year.
The board has declared an interim dividend of 7 cents per share to be paid on April 5.
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support