GUD (ASX:GUD) share price on watch after strong Q1 growth

The GUD Holdings Limited (ASX:GUD) share price will be one to watch this morning after the release of its Q1 update…

| More on:
Woman in pink sweater lying on dock with binoculars to her eyes

Image source: Getty Images

The GUD Holdings Limited (ASX: GUD) share price will be one to watch on Friday following the release of its first quarter trading update.

How did GUD perform in the first quarter?

When the products company released its full year results in late July, management revealed that FY 2021 had started positively.

At the time, the company advised that it had experienced double digit growth in Auto sales compared to the prior comparable period.

Management noted that this was being driven by a recovery of underlying demand and an unwind of reseller destocking.

At that point in time, the company expected this strong demand to moderate as major reseller restocking concluded and pent up end-user demand abated.

However, pleasingly for shareholders, that hasn’t been the case and its strong sales performance continued across both Automotive and Water divisions during the first quarter.

The Automotive business reported first quarter sales growth of almost 16% and the Davey business has delivered 10% revenue growth. The latter was driven by favourable agricultural conditions and rural demand in Australia. This has offset lower demand in New Zealand and notably slower sales to tourism dependent export markets.

As a result, first quarter group sales have increased approximately 14% over the prior corresponding period. This is despite government lockdown restrictions impacting sales in Victoria and the Auckland region.

Managing Director and CEO, Graeme Whickman, commented: “Our employees are focused on our businesses remaining compelling and resilient suppliers to our customers and ensuring GUD remains financially strong and thus well placed to respond to the opportunities such times may trigger – it’s clear that the operational costs and importantly incremental employee efforts have been notable, I’d like to go on record and thank them for their contribution through this challenging period.”

Outlook.

Due to the uncertainty caused by the pandemic, management warned that its first quarter sales performance cannot be extrapolated over the remainder of the financial year.

As a result, it believes it is inappropriate to provide half year or full year earnings guidance at this stage.

Incidentally, one broker that was pleased with this update is Goldman Sachs. This morning it retained its buy rating and lifted its price target to $14.75.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

Motley Fool contributor James Mickleboro 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 Scott Phillips.

More on Share Market News

a group of people gathered around a laptop computer with various expressions of interest, concern and surpise on their faces. All are wearing spectacles.
Broker Notes

Broker says Life360 (ASX:360) share price has ~80% upside

The Life360 Inc (ASX: 360) share price was one of the best performers on the Australian share market in 2021. …

Read more »

best asx shares represented by best in show ribbon
Broker Notes

3 ‘champion stocks’ for ASX investors in 2022

If you’re a fan of buy and hold investing, then you may want to look at the “champion stocks” listed …

Read more »

Young woman in yellow striped top with laptop raises arm in victory
Share Gainers

These were the best performing ASX 200 shares last week

The S&P/ASX 200 Index (ASX: XJO) had a week to forget after the US Federal Reserve indicated that it would start to …

Read more »

asx share price falling lower represented by investor wearing paper bag on head with sad face
Share Fallers

These were the worst performing ASX 200 shares last week

It was another tough week for the S&P/ASX 200 Index (ASX: XJO) after the US Federal Reserve indicated that it would start …

Read more »

a group of stockbrokers sit in a room with a computer and writing on a wall in chalk indicating calculations and graphs while discussing something on the computer screen.
Broker Notes

Here’s what 67% of brokers think of the current IAG (ASX:IAG) share price

Key points The IAG share price traded up today IAG has made a solid start to the year having rallied …

Read more »

Top 10 - asx shares today
Share Market News

Here are the top 10 ASX shares today

Today, the S&P/ASX 200 Index (ASX: XJO) fought back against the selling pressure throughout the day to finish in the green. …

Read more »

The word inflation written with a ticking time bomb.
Share Market News

Why is it when Jerome Powell sneezes, the ASX 200 catches a cold?

Key points The ASX 200 took a hit following comments from the United States Federal Reserve chair Jerome Powell Expectations …

Read more »

A female financial services professional with a manicured black afro hairstyle turns an ipad screen to show a client across the table a set of ASX shares figures in graph format
Bank Shares

Goldman tips Bank of Queensland (ASX:BOQ) share price to rise 25%

If you’re interested in gaining exposure to the banking sector, then it could be worth considering Bank of Queensland Limited …

Read more »