Having messed up its chances with stick vacuums, Godfreys is now jumping onto the next big trend - green, eco-friendly cleaning products.
The vacuum cleaner retailer is looking to diversify after admitting it failed to capitalise on the popularity of stick vacuums over traditional barrel vacuums, an error that has caused profit to shrink.
With consumers turning towards non-toxic, environmentally friendly sprays and wipes, Godfreys is buying New Zealand cleaning supplies business The Service Company for $NZ2.7 million ($A2.54 million).
The business sells a range of supplies to businesses and government, and Godfreys plans to stock those products in its 223 stores across Australia and New Zealand.
"There is a growing trend towards environmentally friendly products and this will be a significant enhancement to our offering," chairman Rod Walker said.
The move also broadens the vacuum cleaner specialists' presence in the highly fragmented, $500 million commercial cleaning sector.
"We look forward to developing this side of our business further and to capitalising on the growth in this market with an innovative product range," Mr Walker said.
News of the acquisition came as the company reported a 15 per cent drop in half year net profit to $3.6 million, a fall it had flagged in January.
Comparable store sales dropped 5.2 per cent in the six months to December 31.
Godfreys confirmed its recently issued forecast of a full year underlying profit to between $8.5 million and $9.2 million, downgraded from its previous guidance of $12.9 million.
The company's shares have more than halved in value since it revealed its weaker sales and downgraded earnings forecast in January, but saw some relief on Thursday, adding four cents, or 3.6 per cent, to $1.14.
GODFREYS MISSES THE MARK
* Net profit down 15 pct to $3.6m
* Revenue flat at $90.5m
* Inaugural interim dividend of 7.5 cents
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