Sunbeam’s challenge to price undercutting

By Keri Algar

SYDNEY, NSW: The future direction of Sunbeam was described in a notice issued to shareholders in preparation for the October AGM of parent company, GUD Holdings.

The annual report states that Sunbeam will continue investing heavily in new products and technologies to grow sales and margins, as well as developing new categories.

This investment will tackle the issue of small independent electrical retailers losing market share to discount mass merchants, according to the report.

“These forces have serious implications for major brands over the long term. They impose on brand owners the imperative to continue investing in new products to ensure that consumers are able to make effective purchasing decision on the basis of product features and benefits, not just on price,” said the report released today on the Australian Securities Exchange (ASX).

In July GUD announced a record level of $46.4 million net profit after tax (NPAT), a 33 per cent hike from prior year. For the company’s consumer product segment comprising of Sunbeam and Oates sales declined by two per cent on prior year and earnings before interest and tax (EBIT) increased by 13 per cent to just under $34 million.

Improvements came not only in profitability by also in the balance sheet and across all financial ratios, according to a statement released on the ASX.

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