The GWA Group Ltd (ASX: GWA) share price is up 5.47% after it announced a solid set of results for the first half of the 2019 fiscal year, showing continued top line growth while maintaining profitability. The company declared a fully franked interim dividend of 9 cents per share, up 6% on the previous corresponding period.
GWA manufactures and distributes building fixtures and fittings to households and commercial premises.
A brief summary of the group results is provided below:
- 2.6% revenue growth pcp
- A 7.3% increase in underlying net profit after tax, driven by higher EBIT and lower interest expense due to lower debt
- EBIT margin maintained at 24.9%.
- Operating cashflow up 31.6% driven by more efficient working capital management, helped by a new distribution centre in NSW
Revenue growth in spite of somewhat challenging market conditions saw the group gain market share over the period. A decline in residential construction activity dragged on GWA's detached house completions and medium to high-density dwelling completions, which together make up a third of group revenues.
GWA foresees similar market conditions in the second half of FY19, with second-half group EBIT expected to be in line with the first half.
The group also stated that its proposed acquisition of shower and tapware manufacturer Methven Limited (NZE: MVN) is expected to complete by mid-April, subject to regulatory and shareholder approvals.
