GWA International Limited (GWT)

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General Information

Company Name:	GWA International Limited
Stock Code:	GWT
Website:	www.gwail.com.au
Market Cap ($M):	936
Equiv. Shares (M):	301

Research Report Available

Report price : $16.50 (inc. GST)
Research by : Aegis Equities Research

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Current Price Data⁺

Current Price	Open	High	Low	Last Close	Volume	Price Movement
$ 3.100	$ 3.110	$ 3.120	$ 3.050	$ 3.110	277,970	$ -0.010 -0.322 %

Current Broker Consensus Recommendation

Recommendation :	Hold
Recommendation Date :	19th Aug 2010
12 Month Target Price (average) :	$3.236
Brokers Surveyed :	8

Market Statistics

% of Market:	0.0742
% of Sector:	2.9035
Sector:	Industrials
Industry Group:	Capital Goods
Industry:	Building Products

Company Overview

Company Overview

GWA International Ltd (GWT) conducts research, design, manufacturing, importing and marketing of household consumer products, and distribution of through a range of channels in Australia and sales offices overseas. Products include bathroom products, lawn and garden care equipment, homeware, hot water systems, commercial furniture and accessories. GWA International Limited comprises six business divisions, Caroma, Dorf, Clark, Dux, Gainsborough, Rover and Sebel.

Company History

In 1982, GWT purchased the Caroma, Sebel and Rover businesses. This was followed by the acquisition of Poolrite in 1988. The company listed in 1993. In 1996, GWT acquired Gainsborough, which was followed by the purchase of Fowler from James Hardie in 1997. Growth through acquisition has continued with the 1999 purchases of Email's Kitchen and Bathroom division and Wisa Beheer BV of the Netherlands. In 1999, GWT sold the Poolrite business.

Differentiating Factor

GWT's dominant position in bathroom products is a key differentiating factor. In addition, the company's ability to leverage off a national distribution network and feeding add-on products through a common fixed cost base have delivered superior rates of return to those of its competitors.

Major Customers & Competitors

GWT has a diverse customer base. The company services the major housing products retailers and trade suppliers, including Wesfarmers (Bunnings), Mitre 10, Harvey Norman, Tradelink and Reece. The company also supplies directly to major customers, particularly in the Sebel furniture operations. GWT's major competitors in the sanitary ware, taps and bathroom fittings segments are now chiefly imported product lines (including "home brand" offerings by Reece and Crane's Tradelink retail networks).

Financial Summary

Year to Jun	NPAT Rep $M	NPAT¹ Adj $M	EPS c	EPS chg %	PER x	PER rel All Ords x	PER rel Sector x	DPS c	Yield %	Franking %	ROE %
2008A	45.9	60.2	21.5	-2.0	14.4	1.4	1.3	18.0	5.8	100.0	15.5
2009A	48.3	51.2	17.9	-16.5	17.3	0.9	(4.8)	18.0	5.8	100.0	12.0
2010A	48.5	48.5	16.1	-10.2	19.3	1.1	0.7	18.0	5.8	100.0	11.3

¹NPAT is normalised by removing non-recurring items and goodwill. All the above statistics are derived from normalised earnings.

Peer Comparison

				P/E (x)		EPS Change (%)		Dividend Yield (%)
Company	Code	Last Price	Mkt Cap	07A	08F	07A	08F	07A	08F
GWA International	GWT	$3.11	$936M	18.6957	14.1000	-10.2100	37.3000	5.9800	5.8000
Crane Group	CRG	$8.53	$668M	19.4116	14.2000	-48.9900	44.6000	4.9700	5.9000
Hills Industries	HIL	$2.29	$568M	12.8665	13.0000	53.5800	5.4000	5.8100	5.7000
Hastie Group	HST	$1.55	$370M	8.2831	8.0000	-47.9600	15.7000	6.5500	6.5000
Korvest	KOV	$4.59	$40M	10.0868	n/a	-30.0700	n/a	6.8800	n/a

Share Price Returns

	3 Months (%)	6 Months (%)	12 Months (%)
GWT	3.4100	-1.0300	19.0700
Sector	9.3832	-8.9903	-2.1818
Market	4.9669	-4.3076	2.0809

Ratio Comparison

	Year	GWT	Sector	Market
P/E (x)	FY07		(0.3)	15.1
	FY08	14.4	10.8	10.1
Yield (%)	FY07		4.0	5.2
	FY08	5.8	6.6	5.2
EV/EBIT (x)	FY07		30.2	12.5
	FY08	9.4	40.9	14.4
EV/EBITDA (x)	FY07		11.9	12.8
	FY08	9.4	16.0	12.1

Directors

Name	Position
B Thornton	Non-Executive Chairman
J J Kennedy	Deputy Chairman
P Crowley	Managing Director
D R Barry	Director
R M Anderson	Director
G McGrath	Director
B Bartlett	Director
D McDonough	Non Executive Director
R Thornton	Executive Director

Management

Name	Position
P Crowley	Managing Director
W Saxelby	Chief Financial Officer

Substantial Shareholders

Name	% Holding
HGT Investments	5.2000

Calendar of Events

Date	Event
06-Oct-2010	Dividend Date Payable for Final Year Result (8.5c 100% franked)
15-Sep-2010	Dividend Record Date for Final Year Result (8.5c 100% franked)
09-Sep-2010	Dividend Ex-Dividend Date for Final Year Result (8.5c 100% franked)
17-Aug-2010	Reporting Date for Final Year Result
07-Apr-2010	Dividend Date Payable for Half Yearly Result (9.5c 100% franked)

Data supplied by Aegis Equities Research Pty Limited (ACN 085 293 910).

IMPORTANT : This information has been prepared without taking into account your objectives, financial situation or needs and you should consider if the information is appropriate for you before making an investment decision. Neither InvestSMART Financial Services Pty Ltd nor any of its Related Companies make any recommendations as to the merits of any investment opportunity referred to in its emails or its related websites. Product disclosure statements for financial products offered through InvestSMART can be downloaded from www.investsmart.com.au or obtained by contacting 1300 880 160. You should consider the product disclosure statement before making a decision about the product. All indications of performance returns are historical and can not be relied upon as an indicator for future performance.