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.

• 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 15.0c per share, with payout ratio at 87%.

• Strong cash conversion ratio of 110% and net debt reduced to a five-year low of $97.0 million.

• Strategic focus on 'Customer First', 'Win the Plumber', and 'Profitable Volume Growth' initiatives drove market share gains and improved customer metrics.

Financial highlights

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

• Normalised EBITDA up 4.0% to $92.6 million; normalised NPAT up 3.4% to $45.6 million.

• Statutory EBIT down 6.8% to $64.4 million and statutory NPAT down 10.4% to $38.6 million due to significant items.

• Operating cash flow reached $101.7 million, with a cash conversion ratio of 110%.

• Final dividend of 8.0c per share, full-year dividend 15.0c per share (+15%), payout ratio 87%.

Outlook and guidance

• FY25 outlook is 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.

• Cash conversion expected to normalize to 90%-100% range.