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Why the GWA Group Ltd share price is rocketing today

GWA Group Ltd (ASX: GWA) is making some of the biggest gains on the ASX200 today, up 7.35% to $2.92 after releasing its half year results, declaring a 7% increase in NPAT to $27.7 million and announcing major strategic changes.  

GWA is a supplier of building fixtures and fittings and is structured in two divisions: Bathrooms & Kitchens and Door & Access. In the report issued today, the Door & Access division was re-labelled “non-core” and is now subject to divestment. Despite this move, GWA reported a good result in the segment, with a 68% EBIT growth over the previous corresponding period. 

The company will pursue a growth strategy focussed exclusively on the bathrooms and kitchen business, where GWA owns and distributes market-leading brands like Caroma, Clark and Dorf. A 3% increase in sales revenue allowed GWA to maintain an EBIT margin close to 25% while increasing investment in marketing and product development. 

On March 6, the company will pay a fully franked 8.5 cents per share dividend to shareholders registered by February 23, compared to a 7.5 cents per share interim dividend last year.  

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Motley Fool contributor Tommaso Autorino has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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