GUD Holdings (GUD) - Half Year Results 2018

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31 January 2018

RESULTS

Half Year 2018

Half Year 2017

CHANGE

Revenue ($m)

230.8

295.8

-22%

Revenue consensus ($m)

223.3

 

 

EBIT continuing operations($m)

39.9

35.7

+12%

Underlying EBIT ($m)

44.7

39.3

+14%

Underlying EBIT consensus ($m)

44.1

 

 

Net Profit After Tax (NPAT) ($m)

28.4

17.7

+61%

Interim Dividend ($)

0.24

0.21

+14%

GUD Holdings Limited (GUD) no real surprises, new direction underway.

  • GUD Holdings (GUD) is a company that has been restructuring its business models since 2014. The result for the first half of 2018 has shown that its new business make up is working.
  • GUD reported a 22% slide in revenue but its 1H18 underlying EBIT reached $44.7 million slightly higher than revised expectations after recent acquisitions. GUD told the market on the second of January that it had completed the divestment of its cleaning products firm, Oates. The full year 2018 result will include a one-off after-tax profit contribution for the Oates sale of $47 million.
  • GUD Automotive division is the largest contributor to earnings delivering sales growth of 14% over the period and earnings growth of 12% at $40.2 million. GUD said that due to the inclusion of new acquisitions in this division over the year, including six months contribution from IM Group, that was acquired back on June 2017, margins were slightly lower than expected but set to improve overtime. Management also mentioned it may be looking for new acquisition opportunities in the auto space. Ryco filters business is now seeing improvements on earnings due to the interrogation of the IM Group’s products.
  • GUD water products (DAVEY) listed a 9% improvement in earnings up to $4.7 million with revenue lifting by 2% to $52.3 million. GUD is focused on improving Davey’s cost position and expects to have a stronger second half due to new innovations.
  • As a result of changes in the business make up, the company is now expecting underlying earnings (EBIT) for the full year will to be around $90 million, which was slightly below the previous guidance of $90–94 million.
  • GUD will pay out an interim dividend of $0.24 up 14% year on year. The ex-dividend date will be on 13 February 2018 with payment due on 2 March 2018.

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