GWA Group (GWA) H2 2024 earnings summary

Executive summary

• Achieved group volume growth of 2.1% year-over-year, with Australia up 3.8% and UK up 4.3%, offset by a 16.5% decline in New Zealand due to recessionary conditions.

• Normalised EBIT increased 5.4% to $74.2 million, with EBIT margin improving to 17.9% from 17.1% year-over-year.

• Fully franked full-year dividend increased by 15% to 15.0 cents per share, with payout ratio at 87%.

• Maintained strong cash generation and lowest net debt in five years, with net debt reduced 17% to $97.0 million.

• Strategic focus on 'Customer First' and 'Profitable Volume Growth' drove market share gains and improved customer service metrics.

Financial highlights

• Group revenue rose 0.4% year-over-year to $413.5 million; Australia sales up 1.8%, UK up 8.6%, New Zealand down 16.5%.

• Normalised NPAT up 3.4% to $45.6 million; reported NPAT down 10.4% to $38.6 million due to significant items.

• Normalised EBITDA up 4.0% to $92.6 million.

• Cash conversion ratio at 110%; operating cash flow $101.7 million.

• Significant items totaled $9.7 million pre-tax, mainly from NZ restructuring, UK ERP, and digital platform enhancements.

Outlook and guidance

• FY25 outlook mixed: Australia faces segment variability, NZ remains challenging, UK expects modest recovery.

• Focus on healthcare, aged care, and commercial refurbishment in Australia; multi-residential growth expected but timing uncertain.

• Price increase of ~4% implemented in Australia from February 2024.

• Capex expected at $4–6 million; significant items of $5–6 million for UK ERP and digital initiatives.

• Strategy remains focused on market share gains, technical leadership, and controlling controllables.