Paint supplier DuluxGroup expects a resilient home renovation market will underpin profit growth in fiscal 2016.
The company, whose brands include Dulux Paints, Selleys adhesives and Yates garden products, has lifted its annual net profit for fiscal 2015 by 7.9 per cent to $112.8 million, from $104.5 million a year earlier.
Excluding restructuring costs, underlying profit was $124.7 million in the year to September 30, 2015.
DuluxGroup managing director Patrick Houlihan said it was a solid result, underpinned by a continued strong performance from the Australian paints and coatings business, Selleys and Yates.
The Australia and New Zealand paints and coatings business generated earnings growth of 5.7 per cent.
"The outlook overall remains positive, particularly in Australia and New Zealand, which represents the majority of our business," Mr Houlihan said on Wednesday.
"The existing homes segment which represents nearly two-thirds of Dulux group revenue, is expected to continue to provide resilient, profitable growth."
In Australia, Dulux's primary market is more than nine million existing homes, of which more than 70 per cent are older than 20 years.
Mr Houlihan said the renovation paint market tends to grow at around half the rate of the nation's overall economic growth.
Even in tough financial times, people still do jobs around the home, including painting.
The outlook for the new housing sector, which represents about 15 per cent of group revenue, is expected to remain relatively buoyant, with good momentum in NSW and Victoria.
Mr Houlihan said high prices for homes are not impacting the paint market.
"It (the market) is not highly cyclical. Even during the short-term financial crisis we had in Australia, the paint market did not drop," he said.
Mr Houlihan said the Dulux paints business was stronger than normal in fiscal 2015, in the wake of a lot of promotional activity.
Dulux released a new range, Wash & Wear, under the banner "the best we've ever made", which was launched by stars from US television show Mythbusters.
"That advertising has gone really well," Mr Houlihan said.
Mr Houlihan said that in fiscal 2016 Dulux's commercial and infrastructure markets are expected to struggle, given particular weakness in the energy and resources sectors in Western Australia and Queensland.
Also the growth outlook is weaker for DuluxGroup's small markets in China and Asia, and Papua New Guinea.
Mr Houlihan said that subject to economic conditions and excluding non-recurring items, Dulux expects a net profit after tax in fiscal 2016 to be higher than the fiscal 2015 equivalent of $124.7 million.
Shares in Dulux climbed 12 cents, or two per cent, to close at $6.08.
HOME RENOVATIONS BOOST DULUXGROUP PROFIT
* Net profit of $112.8m, up 7.9pc from $104.5m
* Annual revenue of $1.69b, up 4.7pc from $1.61b
* Final dividend of 11.5 cents per share, fully franked, up from 10.5 cents
