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GWA profits slide as building work stalls

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BRISBANE, Feb 20 AAP

February 20 2013, 1:05PM

Kitchen and bathroom fixtures firm GWA Group has suffered a 21 per cent first half profit drop as home building activity remains flat.

The group's net profit in the six months to December 31 dropped to $15.73 million, down from $19.93 million during the corresponding period in 2011.

It cited $5.2 million in restructuring costs for the bulk of the reduced profit, following a job cuts announcement in December.

Managing director Peter Crowley said the company was reducing the workforce by 12.5 per cent, and would cut another 2.5 per cent in the second half of 2012/13.

"We continue to look at acquisition opportunities, but our focus is clearly on ensuring we deliver the short and long term benefits of our major business restructure," he said in a statement.

GWA said sales were likely to remain flat in the second half of 2012/13 amid soft building activity and the end of federal government stimulus spending.

"There are some signs that new dwelling approvals are starting to recover off a low base," the company said.

"For this reason we do not expect any recovery in sales until the last quarter."

GWA bought API Locksmiths for $13.1 million in October 2012, and said the acquisition had added $6 million to revenue in the first half year.

Still, GWA revenue fell eight per cent to $289.9 million from $315 million, as sales in the kitchen and bathroom segment dropped by five per cent.

Earnings per share stood at 5.17 cents, compared with 4.4 cents at the end of 2011.

Fully franked dividends were six cents a share, down from 9.5 cents.