By Patrick Avenell

SYDNEY: Housewares International (HWI), the Australian suppliers of Breville, Kambrook and selected Philips branded appliances has reported a massive 80.2 percent increase in net profit. This is despite overall sales revenue dropping $12.6million over the last financial year.

In its annual report to the Australian Securities Exchange, HWI non-executive chairman John Schmoll attributed the rise in net profits to the disposal of the Australian homewares business in 2007. Another major factor was a 27.9 per cent increase in international sales, driven heavily by Breville products that have been exported to the US and Canadian markets.

“The Australian market remained extremely competitive, intensifying during the first quarter of the 2008 calendar year,” wrote Schmoll to the ASX. “Market share overall remained stable during the year, increasing towards the end of the period.”

In total, sales revenue was $425.8million for FY08, down 2 per cent from FY07. Underlying net profit after tax is $20.9 million, up 80.2 per cent from $11.6million. Underlying earnings per share is 16.5 cents, an increase of 6.2 cents from FY07.

Schmoll notes that most of these increases were created in the first half the financial year, with negative economic conditions preventing HWI from achieving even greater results.

“Following a strong first half, the group did, as with the rest of the industry, experience a retail slow-down in the second half as global economic uncertainty and volatility increased.”

For the future, HWI intends to grow its share in a mature Australian market and grow sustainable sales and earnings in international markets. The key strategy for this second goal is three-pronged: continued investment in core brands, especially Breville; innovation into new products and enhanced category depth; and continued infrastructure investment in management, IT and supply chain.