Good performance from Oates cushions parent company’s losses

Sales of Oates cleaning products improved 6 per cent over the half-year period that ended on 31 December 2015, reported parent company GUD Holdings.
Oates' CEO David Birch
Oates’ CEO David Birch

Sales of Oates cleaning products improved 6 per cent, with growth recorded across all its domestic markets, in the half-year period that ended on 31 December 2015, reported parent company GUD Holdings on 27 January.

Oates’ underlying earnings before interest and tax (EBIT) also increased 4 per cent to $5.8 million, said the company press release.

However, GUD Holdings did record some overall losses due to poor performance from a few other businesses within the group. The company’s ‘reported net profit plunged 90 per cent to $1.7 million and reported EBIT fell 38 per cent to $17.2 million after the company booked $18.5 million in impairment charges, mainly goodwill in the Dexion business,’ noted a 28 January article by Sue Mitchell in the Sydney Morning Herald.

“Both Davey [who makes water pumps] and Oates reported profit growth on last year, however the financial performances of Sunbeam [appliances] and Dexion [racking for warehouses] have provided us with challenges,” managing director Jonathan Ling said in GUD’s release.

“The rest [of the business] is performing better than expectations but the upside is not as much as the downside at Dexion and Sunbeam,” Mr Ling then said in the SMH article.

Still, the underlying EBIT for the whole of GUD Holdings ‘increased 33 per cent to $37.2 million with growth from the automotive, Davey and Oates businesses and an initial contribution of $15.4 million from the recently acquired Brown & Watson International (BWI) automotive parts business,’ noted the GUD release.

Revenue also improved over all by 20% to $356 million.

‘The interim dividend was maintained at the same level as last year, at 20 cents per share fully franked, and is payable on 4 March 2016. This represents a payout ratio of 84% on the underlying earnings per share.’

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