Waterco Swims Against The Tide And Reports A 101% Net Profit Rise

Sept. 1, 2009 - PRLog -- The Group’s net profit for the year to June was $2,3 million following a year of consolidation in the group. This net profit after tax increase is 101% higher than in 2008, when profit is adjusted for the goodwill writedowns of that year,. Sales revenue for the period was $71.6 million, a reduction of $4.9 million on the previous year due mainly to the sale of its Chemical Division business at Bankstown, in Australia.

According to Waterco’s Chairman, Mr Soon Sinn Goh, this outstanding result was achieved following a fire that destroyed their main manufacturing facility in Malaysia in August, two years ago.

“Waterco have fought back well to post a much improved result despite the global financial crisis,” Mr Goh said.

“In terms of our 62-store Swimart franchise group in Australia and New Zealand, the full year revenues of the Swimart retail stores were ahead of the previous year by 8 percent. Double digit growth was recorded in all states and NZ except NSW where retail sales remain sluggish.”

New pool builds continued to decline in 2008/09 as the global financial crisis made consumers wary of further expenditure. The emerging business of commercial water treatment equipment continued strongly in both Australia and New Zealand, which negated the decline in the residential sector.

“Waterco Far East is now the Group’s principal manufacturing facility for pumps and filters for both the commercial and the residential sectors,” Mr Goh said.
“Waterco Far East supplies all our major overseas divisions, including Australia.”

Trading conditions in North America and Canada were more difficult. Waterco North America reported an Earnings Before Interest and Tax (EBIT) loss for the year of $1.742 million, an improvement of 21% on the previous year.

“In a year of tough operating conditions globally, it was our North America division that felt the brunt of the impact. Whilst the rest of the Group entities managed to turn in some encouraging results to negate this impact and provide profitability to the Group, we are required by accounting standards to test the impairment of the value of the Parent Entity’s interests in the North American entities. As a result, we have provided for impairment of inter-company loans to the tune of $3.22 million, after tax, in the books of the Parent Entity. This provision does not in any way reflect the performance of the Parent Entity and does not affect the Group results, as the results of the North American entities have
already been consolidated into the Group’s figures.”

Waterco Europe’s sales revenue improved significantly despite the global financial crisis, turning in an EBIT of $0.688 million, up 182% on the previous year . New key distribution relationships were formed, reflecting growing product acceptance and increased ranging with wholesalers.

“The global financial crisis had affected Europe considerably with distributors cancelling some orders or delaying delivery until they were certain of being able to meet their commitments,” Mr Goh said.
“Despite these setbacks, results for the year were excellent.”

Waterco has declared a final dividend payment of 3 cents, payable to shareholders on 18 December 2009.

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