Shares in GWA Group fell sharply yesterday after the bathrooms and kitchens group revealed a COVID19 – powered sales slump in the year to June saw sales fall short of forecasts.
The shares fell 10% at the outset and ended the session down 10.5% at $2.47.
Revenue was up 4% in the year to 30 June 2020 to $398,7 million, while earnings before interest and tax (EBIT) from normal activities fell 41% to $70.3 million from $119.4 million in 2018-19.
Net profit after tax slumped 53% to $43.88 million, compared to $94,04 million in the year prior.
That net profit in the year to 30 June 2019 included profit from the sale of the company’s door and access systems business, which contributed $50.8 million to net profit after tax in that year.
So in fact GWA made a loss from trading.
GWA announced a final dividend of 3.5 cents a share (8 cents previously), taking dividends for the full year to 11.5 cents, fully franked.
That’s down sharply from the 19.5 cents paid in 2018-19
The company also resumed its dividend reinvestment plan with shares offered at a 1.5% discount under the plan (always a sign of a company under some financial pressure).
“Our top line was significantly impacted by lower construction activity, merchant destocking in the first half, and the impact of the COVID-19 pandemic and lower than expected merchant restocking in the last quarter of the year,” CEO Tim Salt said.
“Our continued focus on operational and cost discipline across the business resulted in a resilient EBIT margin of 18.0 percent compared to 18.5 percent in the prior year.
“While markets were challenging and compounded by the unforeseen impact of COVID-19, our focus continues to be on controlling those elements within our control,” he said.
