GUD bemoans Dexion woes and cheers automotive

Lack of projects hits racking arm but truck parts and lights do good business

GUD bemoans Dexion woes and cheers automotive
Lack of racking projects harmed Dexion's performance for GUD


Manufacturer GUD reports a $43 million full financial year net loss, down from a $32.3 million profit last year, as hopes for a turnaround in warehousing services arm Dexion failed to materialise.

Dexion suffered in the second half from a "lack of major projects in the Australian racking market and lower demand in the commercial products market", with project delays to the fore.

But its New Zealand business recorded a record financial result, "partly due to the commencement of a substantial automated warehouse project in that market".

The subsiddiary lost $3.8 million in underlying earnings before interest and tax (EBIT) for the year.

What silver lining there was came thanks in part to Narva lighting and electrics supplier Brown & Watson, its annual financial report shows.

"The recent trading performance together with the near term outlook for Dexion resulted in the decision to impair GUD’s holding value by $75.7 million pre-tax, of which $19 million was recognised in the half year results," GUD managing director Jonathan Ling says.

"Following the impairment the holding value of Dexion stands at $44 million and goodwill has been written off."

The ‘automotive’ segment that includes Narva along with Ryco and Westfil saw revenue of $112 million and EBIT of $36 million, a rise of 11 per cent and 10 per cent respectively.

Ryco’s introduction of diesel particulate filters and Syntec high-performance filters along with its Japanese truck filter program to specialist distributors helped.

For the coming year, GUD expects more of the same from its new portfolio "core", the automotive segment, which contributed 80 per cent of its gross earning last year.

Growth through acquisition and organically along with further collaboration between Brown & Watson and Ryco can be expected there.

"It is also apparent that there still remains much to be done at Dexion and while trading conditions remain difficult there are signs, from a profitable last quarter, that the approach of a new management team is starting to head the business in the right direction," Ling says.

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