GUD, which also owns Oates cleaning products, made a net profit of $1.7 million in the six months to December 31, compared to $17.3 million in the previous corresponding period.
The company attributed the drop in net profit to a non-cash goodwill and inventory impairment of $18.5 million, mostly due to its industrial and commercial business Dexion’s $15 million writedowns in goodwill and in obsolete and slow moving stock.
GUD managing director Jonathan Ling said measures were in place to lift Sunbeam and Dexion’s performances.
This included an “average 8 per cent price increase” of Sunbeam products set for February.
“While sales in Sunbeam improved in the half, and market share was maintained, the decision to defer price increases, to offset the effect of the lower currency on products costs, constrained profit performance,” Mr Ling said.
He said Sunbeam’s volumes would also benefit from the company regaining Big W’s electric blanket business and ranging in Woolworths supermarkets.
“Dexion’s performance in the half was negatively affected by weak project demand in the Australian racking products market and unrecovered overhead costs associated with operating the Malaysian factory at volumes below its breakeven position,” he said.
The company will pay an interim dividend of 20 cents, unchanged from the previous corresponding period.
Shares in GUD Holdings dropped 10 per cent, or 79 cents, to $7.11 at 11.02am (AEDT).
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