GUD, which owns the Sunbeam electrical appliance brand and last month sold its iconic Victa lawnmower business, on Thursday booked a net profit of $37.40 million for 2007/08 up from $33.64 million in the prior year.
Its earnings before net interest, tax, restructuring expenses and the gain on the sale of Victa rose 14.4 per cent to a record $68.9 million, reflecting the strength of the Sunbeam brand and higher returns from automotive products, Oates cleaning products and Victa after extensive restructuring.
The company said the "strong" operating performance was consistent with its guidance for a 10 to 15 per cent lift in in trading earnings before interest and tax (EBIT).
GUD managing director Ian Campbell said the company's brand leadership, new products, tight working capital management and cost-reduction program would help maintain solid returns.
"Our objective for trading EBIT for the 2009 full year is to be around the 2008 full year continuing-business level of $63.5 million," he said.
"We expect growth from the water products business to be offset by demand and cost pressures in some of our other businesses."
Campbell told reporters that the outlook statement for GUD was "conservative" because no one knew for sure where the economy was headed.
"In 12 months, if the commentators are right and we are in for a very rough trot, then my 2008 actual [result] will be seen to be a very good result in 2009," he said.
"If the commentators are overshooting the severity of this, and everything picks up again, then I'm happy to be called conservative and shoot the lights out."
GUD shares fell 40 cents or 4.61 per cent to $8.28 on Thursday.
Campbell said GUD's Sunbeam electrical products would be under the most pressure as sales were linked to discretionary spending by consumers.
But he said there were still plenty of costs to be taken out of Sunbeam and GUD's other divisions.
In 2007/08, all of GUD's businesses generated double-digit EBIT growth except for water products.
The consumer products division - which includes Sunbeam, Victa and Oates - lifted earnings by 49 per cent to $38.3 million.
Victa's earnings rose to $5.4 million from a small loss in the prior year, following favourable growing conditions in New South Wales and Queensland, new product launches and better retailer programs.
Sunbeam grew market share and benefited from strong demand for heating products.
Higher costs for raw materials, the withdrawal of China export rebates, the appreciating Chinese currency and increased shipping costs were partly offset by the stronger Australian dollar.
GUD said Sunbeam would be challenged by increasing competition, higher interest rates and low levels of consumer confidence, and GUD would therefore renew its focus on cutting costs and new products.
Earnings from the water products division, which sells pumps and pressure systems, fell 29 per cent to $13.5 million as demand for swimming pools, spa baths and spa pools declined, but a profit recovery program was in place.
GUD's automotive products division, which sells filters, brake pads and fuel pumps, achieved record earnings of $19.4 million - up 15 per cent - but experienced cost pressures from offshore suppliers, although some were offset by the stronger Australian dollar.
GUD also warned that demand for automotive filters and other parts would come under pressure as petrol prices stayed at record highs and distances travelled declined.
GUD's security products business booked solid earnings of $2.5 million - up 10 per cent - despite a small drop in sales and cost pressures from increasing brass and zinc prices.
GUD's total revenue for the year ended June 30, rose 3.1 per cent to $535.15 million.
The company declared a final dividend of 38 cents per share, up from 34 cents in the prior corresponding period.
The total dividend for the year was 68 cents, compared to 61 cents in fiscal 2007.
