Alesco's Project Restore hopes to turn business around

25/07/2012 - Alesco Corporation has plunged into the red with a $13.9 million loss for its 2012 financial year.

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The garage doors, windows and building products maker on Tuesday said conditions in the housing market were expected to remain tough and volatile for the rest of the calendar year.

Alesco's loss compared with a $13.57 million net profit in fiscal 2011.

The company, which is subject to a $210 million takeover bid from DuluxGroup, said it believed it would be able to generate earnings growth in the next three to four years.

"Alesco also stands to benefit from a recovery in the Australian and New Zealand detached housing and renovation markets and the completion of the Project Restore initiatives," the company said in a statement.

Alesco reaffirmed its advice to shareholders to reject the takeover offer from DuluxGroup on the basis it was materially inadequate and did not reflect fair value for shareholders.

"The offer does not adequately recognise the value of Alesco's strong portfolio of market-leading brands and individually valuable businesses," the company said.

Alesco is in the middle of a major restructure, known as Project Restore, in an attempt to turn its business around during tough times in the housing market.

It said the changes being made under the restructure along with its low gearing levels, and a solid performance in the second half put the company in a good position to withstand tough market conditions in the year ahead.

Chief executive Peter Boyd said Alesco's 2012 result for the year to May 31 had been affected by wet weather as well as the depressed Australian detached housing market.

However, all its businesses had finished the year with a strong sales month and Alesco had managed to maintain gross margins and keep costs under control.

"The benefits of Project Restore will continue to flow in FY13 and FY14," Boyd said.

Source: AAP

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