Poor performance of holding company impacts deeply.
The prices of Sunbeam electrical appliances will rise by about eight per cent following a 90% drop in half year profit by parent company GUD Holdings.
GUD made a net profit of $1.7 million in the six months to December 31, compared to $17.3 million in the previous corresponding period. In today’s announcement, GUD attributed the drop in net profit to a non-cash goodwill and inventory impairment of $18.5 million, mostly due to $15 million writedowns in goodwill and in obsolete and slow moving stock in its industrial and commercial business Dexion.
GUD managing director, Jonathan Ling (pictured above) said a decision to make an “average eight per cent price increase” of Sunbeam products in February was overdue.
“While sales in Sunbeam improved in the half, and market share was maintained, the decision to defer price increases, to offset the effect of the lower currency on products costs, constrained profit performance,” Ling said.
He added that Sunbeam’s volumes would also benefit from the company regaining Big W’s electric blanket business and ranging in Woolworths supermarkets.
However GUD benefited from a $16.2million payment received from Jarden for its 49% share of the Sunbeam joint venture.
Shares in GUD Holdings have dropped 10% or 79 cents.