Business Description:
GWA Group Ltd (GWA, formerly GWA International) is a supplier of building fixtures and fittings to households and commercial premises. GWA has approximately 2100 employees with manufacturing and distribution facilities located across Australia. GWA currently operates through four distinct business divisions including Bathrooms & Kitchens, Heating & Cooling, Door & Access Systems and Commercial Furniture.

Strategy Analysis:
GWA has strong market positions in most products and is particularly dominant in toilets. A long history, since 1941 in Caroma's case, has allowed it to build its presence. Markets are not overly competitive and brand strength has allowed prices to at least hold during the housing downturn. Established distribution channels, including strong relationships with market leading plumbing retailers TradeLink and Reece, make it harder for others to enter the market. The company prides itself on its ability to innovate and provide a wide variety of products to meet various market needs. Famously, Caroma was the first in the world to develop the two button dual flush system. Substantial investments continue to be made. New products that are more water efficient are tapping into the consumer shift to reduce water consumption. GWA may benefit from acquisitions to extend growth. GWA Group reported NPAT up 30.6% to $63.36m for the year ended 30 June 2011. Revenues from ordinary activities were $726.37m, up 10.6% from last year. Diluted EPS was 20.87 cents compared to 16.10 cents last year. Net operating cash flow was $88.56m compared to $67.19m last year. The final dividend declared was 8.5 cents, taking the full year dividend to 18.0 cents, in line with 18.0 cents last year. Looking ahead, restructuring costs and related capital investment will cost approximately $20.0m, but the company expects the profit and cash impact to be largely offset in the year through property sales and working capital management improvements.