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Dexion drags GUD Holdings into the red

AAP logoAAP 28/07/2016 Andrew Leeson

The owner of the Oates cleaning product brand has posted a $43 million loss, dragged into the red by storage equipment company Dexion.

GUD Holdings Limited said on Thursday that revenue for the 12 months to June 30 rose 20 per cent to $595.5 million, and attributed the overall loss to a $75.7 million pre-tax writedown against the value of Dexion.

The writedown was due to an unexpected slowdown in major warehouse projects in Australia and the Middle East, GUD managing director Jonathan Ling said.

"The demand in both the commercial and industrial sector in Australia is pretty tough at the moment," Mr Ling said.

April's $35.4 million sale of its stake in electrical appliances brand Sunbeam was part a broader shift away from the retail sector, he said.

"The sale makes sense for GUD in rebalancing its portfolio, by removing Sunbeam's recent low and volatile level of earnings," Mr Ling said.

A tough retail market was also hitting Oates, which he attributed to the struggles of hardware chain Masters and the difficulty of pushing through price increases.

Even so, revenue from Oates, water pump maker Davey, and GUD's automotive brands all grew.

Strong growth from its existing automotive brands Ryco and Wesfil were further bolstered by recently acquired Brown and Watson, which supplies car lighting and electrical accessories.

"We are the premium brand owners in the industry," Mr Ling said.

"Our automotive interests are now the core of the portfolio, contributing nearly 80 per cent to operational EBIT (earnings before tax and interest) in the recent year."

GUD IN THE RED ON WRITEDOWN

* Net loss of $43m vs $33.2m profit

* Revenue up 20pct to $595.5m

* Final dividend up one cent to 23 cents fully franked

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