Rising costs a big challenge for GWA International
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SYDNEY, Aug 19 AAP
August 19 2008, 11:15AM
Bathroom fixtures and homewares company GWA International Ltd said rising costs and a weak market in Australia and New Zealand could impact the business in the current financial year.
The company today reported an 18.5 per cent fall in net profit for 2007/08 to $45.89 million, from $56.32 million in the previous year.
Sales revenue rose two per cent to $648.90 million while and trading earnings before interest and tax (EBIT) rose to $99.4 million, from $98.8 million.
"One of the big challenges of the year are cost increases - there are sharp cost increases coming out of Asia at the moment, that's a challenge for all industry players," managing director Peter Crowley said during a teleconference today.
"Our ability to implement price rises, in what at best could be a flat market, will be a crucial success factor for us particularly in building fixtures and fittings."
Mr Crowley said trading conditions were hard to read and a more specific outlook would be given at its annual general meeting in October.
"Building approvals have been falling through to May, June, home lending is weakening and it's a really tough call to make at the moment," Mr Crowley said.
But he said GWA's strong cash flow will provide it with scope to grow its core business fixtures and fittings segment.
The company also believes that it is well placed to make acquisitions, centred around building fixtures and fittings products and related services.
At 1114 AEST GWA shares were down 29 cents or 9.35 per cent to $2.81.
