GUD Holdings Limited : ASX 2012-01-24 Half Year Results Announcement FY12

Reported net profit after tax down 1% to $23 million

GUD Holdings Limited today announced a reported net profit after tax of $23.0 million for the half year to 31st December 2011, down from $23.3 million in the prior year.

The interim dividend has been restored to the pre-GFC level of 30 cents per share fully franked. This represents a payout ratio of 88% on underlying earnings per share.

Total group sales increased 4% to $309.3 million, including a full six months of Dexion sales. This partially compensates for the declines in the Consumer and Water businesses.

Underlying net profit after tax was down 13% from last year's record result, to $23.8 million, as a result of prevailing soft trading conditions across most businesses, particularly those exposed to consumer retail purchasing activity.

The gross profit margin has been maintained at 41.2% of sales despite increasing product cost pressures.

Underlying EBIT was down 10% from last year's record to $39.1 million. The underlying EBIT to sales margin was 12.6%, down from 14.6%, due to a combination of the full six months' contribution from Dexion and margin declines in the Consumer and Water businesses.

"Businesses exposed to the Australian retail trade continue to experience a difficult trading environment and this is evident in the results from our Consumer business, where we reduced prices to maintain competitiveness and volumes," Managing Director Ian Campbell said.

"Although the Dexion business experienced record low levels of major project activity since the acquisition, encouragingly it has won a substantial $60 million of new projects in November and December with more project confirmations expected in the second half," he said.

"These orders are not reflected in the current half's results and their impact will be seen in the latter part of FY12 and into the next financial year."

"Underlying EBIT margin for the group remains healthy at just under 13%. Although this is below our long term average, the improvements anticipated in Dexion's margin will support a recovery in EBIT performance," Mr Campbell said.

"Pleasingly we have been able to restore the interim dividend to the pre-GFC level of 30 cents per share, despite having an increased number of shares on issue. Our objective remains to improve dividends over time," he said.

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