Dulux Group (ASX: DLX) released its final report for FY15 which showed an 11.5% increase in NPAT.
The group manufactures and distributes paints and coatings, consumer and construction products, garage doors and openers, hardware components and other segments. The company’s overall sales revenue increased 4.7% as compared to previous year.
According to the Managing Director Patrick Houlihan, “Solid profit growth was underpinned by the continued strong performance of our Australian Paints and Coatings business, Selleys and Yates. Profit growth has been delivered while we continue to invest in the business fundamentals of brands, innovation and customer service.”
The company is aiming to invest in long term growth, as it announced to build a new water-based paint factory in Melbourne and create new distribution centres in Sydney. Dulux has also launched a new flagship Wash and Wear range under the banner the ‘best we’ve ever made’.
Dulux Group’s largest operating segment, Paints and Coatings Australia and New Zealand grew sales by 6%. The sales growth was reported to be in line with overall market growth, and the EBIT to Sales ratio of the business was maintained at 16.9%.
The company reported a 2% decline in EBIT for the Consumer and Construction Products sector in Australia and New Zealand. Its B&D Garage Doors and Openers business’ EBIT declined 6% due to a drop in sales. EBIT of Cabinet and Architectural Hardware grew by 1.1% despite a sales growth of 8.3%. The margins were impacted by a weaker Australian dollar which made imports from US and Europe more expensive. Miscellaneous sales grew by 6.7% which was driven by margin improvements in China, benefits from foreign exchange and improvements in the South East Asian businesses.
The group has provided a positive outlook for FY16, as it expects growth in its home renovation markets and NPAT to be higher than the current year.
The shareholders were pleased with the result as the stock rose 2% since its announcement in early morning trade.
Author: Imran Valibhoy
Nov 11, 2015
Since Joining the firm in 2006, Imran has worked on a range of M&A and Capital Market transactions in the natural resources, mining as well as projects in the renewable energy sector. Prior to joining Wise-owl, Imran worked at Euroz Securities in Perth, aiding in the advisory and valuation of companies in the mining and industrial sectors in Australia. Imran has a Masters in Banking & Finance from City University's Class Business School in London and a Bacheloor degree in Commerce from UWA.