Paint maker DuluxGroup still expects to achieve profit growth this year as sales are supported by strong home renovation and housing construction activity.
Managing director Patrick Houlihan says the company expects its full-year profit to exceed the previous year’s $143 million.
“Our core existing home renovation markets, which account for approximately two thirds of DuluxGroup revenue, are expected to continue providing resilient, profitable growth,” he said.
New home construction represents about 15 per cent of the Dulux business, and the company continues to do well in that sector, Mr Houlihan said.
Dulux grew its market share in that sector in the six months to March as it is more biased towards the premium end, including home builder Metricon, he said.
There is also a “big pipeline” of new housing construction, particularly in detached houses, that will bode well for Dulux in the second half, Mr Houlihan said.
Dulux made a net profit of $79.2 million in the six months to March 31, up nine per cent from a year ago, and its sales revenue grew 4.2 per cent.
Revenue growth in Australia and New Zealand, where about 70 per cent the company’s earnings are generated, increased by 5.7 per cent.
The company said it also effectively managed its raw material costs.
Chairman Peter Kirby has announced he will retire from the board on June 30, and he will be replaced by non-executive director Graeme Liebelt.
Shares in Dulux were down seven cents, or 0.9 per cent, at $7.98 at 1140 AEST.
DULUX POSTS IMPROVED FIRST HALF RESULT
* Net profit up 9.0pct to $79.2m
* Revenue up 4.2pct to $918.1m
* Interim dividend up one cent to 14 cents, fully franked