GWA Reports 1.9% Revenue Rise and 3.2% EBIT Growth in H1 FY25

Solid Revenue and Earnings Growth Despite Market Challenges

GWA Group Limited has delivered a resilient financial performance for the half year ended 31 December 2024, reporting a 1.9% increase in revenue to $209.9 million. This growth was primarily driven by volume increases in Australia and the United Kingdom, which offset a notable decline in New Zealand's housing and construction sector. The company’s normalised earnings before interest and tax (EBIT) rose 3.2% to $38.5 million, with the EBIT margin improving slightly to 18.3%, reflecting disciplined cost management and operational efficiencies.

However, reported net profit after tax (NPAT) fell 7.2% to $21.5 million, impacted by $3.2 million in pre-tax significant costs related to the UK Enterprise Resource Planning (ERP) system implementation and enhancements to the Group’s digital platforms. These one-off expenses underscore the ongoing investment in technology infrastructure aimed at supporting future growth.

Geographic Performance and Strategic Initiatives

Australia remains the cornerstone of GWA’s revenue base, with a 2.4% increase driven by successful volume growth strategies, including targeted initiatives to engage maintenance plumbers and growth in the health and aged care sectors. The UK business also showed strong momentum with a 14.5% revenue increase, benefiting from new customer acquisitions and local management execution.

Conversely, New Zealand’s revenue declined by 13.3%, reflecting persistent weakness in the local housing market. In response, GWA has streamlined its New Zealand operations, simplifying brand and product offerings and adjusting its organisational structure to better align with market realities.

Robust Cash Flow and Strengthened Balance Sheet

GWA’s cash flow generation remains a highlight, with operating cash flow of $55.4 million and a cash conversion ratio of 116%, indicating strong conversion of earnings into cash. The company’s net debt position improved to $92.3 million, the lowest in over five years, supporting a solid financial footing and credit metrics well within covenant limits.

This financial strength has enabled the Board to increase the fully franked interim dividend by 7.1% to 7.5 cents per share, payable on 7 March 2025. The dividend reflects confidence in the company’s ongoing cash flow and balance sheet resilience.

Outlook and Strategic Focus

Looking ahead, GWA anticipates continued challenges in the Australian office building sector and residential detached housing, with some optimism for multi-residential projects driven by housing shortages. The company remains focused on targeted market segments including commercial, aged care, healthcare, and maintenance plumbing, aiming to deepen market penetration and customer engagement.

CEO Urs Meyerhans emphasised the importance of operational discipline and customer-first strategies in sustaining growth momentum. The completion of the UK ERP project and ongoing digital platform enhancements are expected to underpin future efficiencies and service improvements.