Sharechat Logo

Godfrey Hirst's NZ profit climbs 41% to six-year high ahead of Mohawk sale

Monday 4th December 2017

Text too small?

Godfrey Hirst reaped its biggest profit in six years from New Zealand, leaving the local unit in good health as global flooring manufacturer Mohawk Industries folds the Australasian carpetmaker into its empire. 

The local holding company - Avon Pacific Holdings - reported a profit of $15.4 million in the 12 months ended June 30, up from $11 million a year earlier, the latest financial statements filed with the Companies Office show. Revenue edged up 1.8 percent to $177.8 million and gross margin widened to 24.7 percent from 22.5 percent. Expenses shrank 1.9 percent to $156.2 million on a smaller wage bill, lower redundancy costs and a turnaround in foreign exchange losses. 

The profit was Godfrey Hirst's biggest in New Zealand since 2011 and saw the local unit pay a $13 million dividend, its first for two years. Godfrey Hirst expanded its Kiwi presence when it bought the failed Feltex carpetmaker out of receivership a decade ago, adding to its Clifton Wool Scour and Canterbury Spinners businesses. 

Godfrey Hirst's result was in a period when New Zealand retail spending on furniture, floor coverings, houseware and textile goods shrank 7.6 percent to $2.27 billion, and contrasts with the fortunes of NZX-listed rival Cavalier Corp, which reported a loss of $2.1 million on an 18 percent slide in revenue to $156.1 million, the first time its generated smaller sales than its Australasian rival. 

The local Godfrey Hirst unit paid $119.4 million in dividends to its Australian parent over the past 20 years, or 73 percent of the $163.2 million of net earnings its generated in two decades. 

Last month US-based Mohawk announced plans to buy Godfrey Hirst, ending five decades under the ownership of the McKendrick family in Australia. The deal is subject to closing conditions and regulatory approvals, and comes at a time New Zealand's Overseas Investment Office has been directed to demand higher hurdles in approving the sale of rural land to foreign buyers. 


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: Blue-chip stocks Meridian, A2 lead market lower
NZ dollar rises on Brexit hopes, rate cut reassessment
Three not failing, just needs a new owner - MediaWorks CEO
Major investors back new CBL class action targeting directors
Rip Curl purchase a done deal on Kathmandu proxies alone
Comvita chair Neil Craig eyes the exit once he finds a new CEO
Mercury raises guidance on increased storage, high spot prices
Eroad reports strong 3Q sales growth, eyes ASX listing
MediaWorks puts TV business on the block
NZ dollar benefits as preliminary Brexit deal improves risk appetite

IRG See IRG research reports