Home renovation activity is likely to remain strong as interest rates stay low and house prices rise, paint group Dulux says.
Chief executive Patrick Houlihan told shareholders on Thursday the company was more upbeat about the home improvement market than new home building.
"This large and profitable segment has proven to be quite resilient, and this is expected to continue, underpinned by high levels of home ownership, low interest rates and high house prices," he said.
Housing construction was expected to remain strong, but Mr Houlihan said this represented less than 20 per cent of DuluxGroup's revenue.
Dulux is less positive about its commercial and infrastructure division, which generates about 16 per cent of its revenue.
"In Australia, the outlook for major engineering and infrastructure projects is weak as major capital expenditure projects - particularly in the mining sector - wind down, and the pipeline of new infrastructure projects is still some time away," Mr Houlihan said.
He expects the group to deliver an improved profit in 2014/15 from the previous year's $104.5 million, which was up 39 per cent on the prior year.
Mr Houlihan said conditions in China and Papua New Guinea were expected to remain relatively soft.
He also pointed to softness in the garage doors segment of the business, but this was offset by growth in the paints and coatings division.
Mr Houlihan said the company would monitor the "potentially adverse impact" of a lower Australian dollar and the favourable effects of a lower oil price.
DuluxGroup shares added two cents to $5.74.
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