When GWA Group sold its Door & Access Systems business for $107 million it said it would invest some of the capital in expanding its Bathrooms & Kitchens business and it has done that with an offer to acquire Auckland based and New Zealand Stock Exchange listed Methven Ltd.
GWA Group ((GWA)) has heightened its focus on new product development and gains in market share in the bathroom & kitchen segment. The company has identified an opportunity within this segment, which has become its core after the divestment of several other businesses.
The company has announced the sale of its door & access systems business for $107m. Morgans believes completion of the sale in early FY19 should leave plenty of capacity to pursue organic growth opportunities.
The company has outlined its growth strategy to leverage its core brands in bathrooms & kitchens as well as its market leading position. Areas of growth have been highlighted amid expectations of the potential to increase market share in the renovations & replacements market.
Credit Suisse has upgraded GWA Group to Neutral from Underperform following the first-half result, having spied an opportunity for a tactical trade in the stock, which is supported by 7.3% dividend yield and an on-market buyback.
Gas appliance manufacturer Rinnai has emerged as the buyer of GWA’s Brivis Climate Systems business, with a sale price in line with book value representing a solid outcome, the broker suggests. The broker believes the intention to sell both Brivis and Dux is a good move on GWA’s part.