Dulux Group has lifted full-year profit 5.4 per cent to $150.7 million, while predicting do-it-yourself maintenance and renovations will help it weather a downturn in Australian property construction.
Revenue across Dulux’s Australian and New Zealand businesses – which includes Dulux paints and coatings, Selley’s and Parchem sealants, B&D Group garage doors, and Lincoln Sentry hardware – was up 3.3 per cent to $1.84 billion in the year to September 30.
The company is offering a dividend of 14 cents, 30 per cent franked, up 0.5 cents from same time last year.
Dulux managing director Patrick Houlihan said the result was particularly pleasing given increases in raw material costs, and higher depreciation due to the new 22,000 square-metre, $165 million Merrifield paint factory opening in May.
The company said maintenance work on existing homes – which accounts for 66 per cent of Dulux Group revenue – would continue to provide profitable growth.
“Although new construction approvals are expected to moderate in FY19, completions are expected to remain at FY18 levels given the pipeline of work,” the company said in a release.
“Non-residential commercial construction markets are expected to continue to grow, while relevant engineering construction and maintenance markets are expected to be flat overall.”
Dulux said it was expecting consistent demand in home improvement products given that maintenance activities of existing homes are often of relatively small value and do-it-yourself in nature.
It expects the commercial and engineering construction markets, which account for about 15 per cent of DuluxGroup revenue, to grow.
Earnings in Dulux’s “other businesses” segment declined $600,000, or 5.3 per cent, with growth in Yates’ garden care and Dulux Papua New Guinea more than offset by investment in Dulux Group’s UK business and its Indonesian joint venture.
At 1025 AEDT on Wednesday, Dulux shares were 4.0 cents, or 0.5 per cent, higher at $7.44, against the backdrop of a flat overall market.
DULUX PAINTS A FULL-YEAR PROFIT LIFT
* Net profit up 5.4pct to $150.7m
* Revenue up 3.3pct to $1.84b
* Final dividend up 0.5 cents to 14 cents, 30pct franked