Godfrey Hirst's NZ profit climbs 41% to six-year high
Global flooring manufacturer Mohawk is taking over the company.
Godfrey Hirst reaped its biggest profit in six years from New Zealand, leaving the local unit in good health as global flooring manufacturer Mohawk Industries folds the Australasian carpetmaker into its empire.
The local holding company – Avon Pacific Holdings – reported a profit of $15.4 million in the 12 months ended June 30, up from $11 million a year earlier, the latest financial statements filed with the Companies Office show. Revenue edged up 1.8% to $177.8 million and gross margin widened to 24.7% from 22.5%. Expenses shrank 1.9% to $156.2 million on a smaller wage bill, lower redundancy costs and a turnaround in foreign exchange losses.
The profit was Godfrey Hirst's biggest in New Zealand since 2011 and saw the local unit pay a $13 million dividend, its first for two years. Godfrey Hirst expanded its Kiwi presence when it bought the failed Feltex carpetmaker out of receivership a decade ago, adding to its Clifton Wool Scour and Canterbury Spinners businesses.
Godfrey Hirst's result was in a period when New Zealand retail spending on furniture, floor coverings, houseware and textile goods shrank 7.6% to $2.27 billion, and contrasts with the fortunes of NZX-listed rival Cavalier Corp, which reported a loss of $2.1 million on an 18% slide in revenue to $156.1 million, the first time its generated smaller sales than its Australasian rival.
The local Godfrey Hirst unit paid $119.4 million in dividends to its Australian parent over the past 20 years or 73% of the $163.2 million of net earnings it generated in two decades.
Last month US-based Mohawk announced plans to buy Godfrey Hirst, ending five decades under the ownership of the McKendrick family in Australia. The deal is subject to closing conditions and regulatory approvals, and comes at a time New Zealand's Overseas Investment Office has been directed to demand higher hurdles in approving the sale of rural land to foreign buyers.
(BusinessDesk)
Paul McBeth
Mon, 04 Dec 2017
Mon, 04 Dec 2017
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Godfrey Hirst's NZ profit climbs 41% to six-year high
72125