Bathroom and kitchen supplier GWA Group has called on governments to encourage people into the housing market by cutting unnecessary regulations.
Managing director Peter Crowley said that a deteriorating housing market and low consumer confidence was responsible for the company’s 37.4 per cent fall in net full year profit to $39.7 million.
“What governments need to do to turn around the housing market is to cut all the red and green tape that holds up or adds costs to developers providing new stock of land and housing,” Mr Crowley said on Tuesday.
Sales revenue for the year to June 30 was down six per cent to $602.1 million and earnings before interest and tax was down 25 per cent to $75.4 million compared with the previous 12-month period.
“Our businesses have performed well in a difficult market with dwelling construction and consumer confidence declining to the low levels experienced during the global financial crisis,” he said.
“The decline in federal government stimulus spending and the cessation of rebates on environmental water heaters also had a material impact on sales.”
The federal government had ended many of its stimulus programs during the previous year, which had contributed to this year’s dip in sales, Mr Crowley said.
The end of state and local government water-saving initiatives also affected sales.
Mr Crowley said more government stimulus was not the answer to turning around the housing market.
He said the NSW government’s reduction in stamp duty was a move in a positive direction.
Although the housing market was weak, Mr Crowley said there were signs that housing approvals were starting to pick up, especially in NSW, Queensland and Western Australia.
“Affordability is improving, with lower interest rates and house prices appear to have bottomed,” he said.
Ongoing company restructuring had resulted in an eight per cent cut in its employee number over the year.
GWA maintained a final, fully franked, dividend of 8.5 cents per sharer, with the total fully franked dividend for the full year maintained at 18 cents a share.
At 1557 AEST shares in GWA Group were down 8.5 cents at $1.935.
