HWI reports leaner and more focused structure in annual report

By Martin Vedris

SYDNEY: Highlights of the Housewares International (HWI) annual report include a 6.1 per cent growth in sales to $371.3 million, a 17 per cent growth in international sales and the disposal of the loss-making Australian Homewares and SABCO businesses.

Combined sales revenue from the company’s discontinuing operations were down 11.7 per cent to $65.6 million. According to a statement from HWI, ‘the 2007 year was an extremely challenging year for the company. Important restructure initiatives were identified which culminated in the disposal of the Australian Homewares and SABCO businesses. The company’s energies will now be focused on Electrical and International; the core competencies.’

The annual report states that the strategic intent of the company is a stated commitment to innovative product development to drive sales growth both in Australia and internationally. According to a statement, HWI has ‘built and staffed a world class product development centre in Sydney; maintained efficient procurement and quality assurance centres in Hong Kong and Shanghai; employed experienced marketing and sales executives in its key markets around the world; and maintained effective administration processes to support growth initiatives on an international platform.’

According to HWI, ‘the result of this transformation is that an increasing proportion of the company’s earnings are being derived from the electrical and international businesses and, in particular, the company’s offshore business units.’

Group sales increased to $436.9 million, up from $424.2 million in 2006, with sales revenue from continuing operations up 6.1 per cent to $371,279 and sales revenue from the discontinuing operations down 11.7 per cent to $65,603. International sales increased by 17 per cent to $178.8 million.

The group’s EBITDA was $24.2 million, down from $31.2 million in 2006, the Electrical and International EBITDA was $33.8 million, down from $37.0 million in 2006.

The Australian Homewares loss was $9.6 million, up from the 2006 loss of $5.8 million. The profit after tax (PAT) loss for Australian Homewares PAT was $8.3 million, which was an increase of the 2006 loss of $6.1 million.

Despite being ahead of the earlier guidance of $8.5 to $9.5 million, the group’s underlying profit after tax (PAT) of $11.6 million was down from $16.1 million in 2006. Also down was the PAT for electrical and international sales at $19.9 million, down from $22.2 million in 2006.

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