News Stories for September
Danks Records Strong Overall Result
Danks Holdings Limited has announced an 18.6% increase in revenue to $533.5 million for the year ending June 30, 2004. This included a ‘one off item’ in the form of a property sale.
Product sales reflected a continued growth for the eighth year in succession, showing a strong total of $485.4 million, an increase of 12.7%. “The company’s close attention to our customers, our innovative systems, the very broad product range offered, and comprehensive marketing programs have continued to satisfy existing customers, along with attracting a number of new group members,” said Managing Director, Graeme Danks. Net profit was $7.16 million, an increase of 37.4%. This results was boosted by the inclusion of the sale of the Danks steel division property. When the property sale is excluded from the profit before tax figure, it shows a disappointing increase of 3.1% on last year. “It is proving to be a real challenge for the company to run our many multiple warehouses as efficiently as we would desire,” said Graeme Danks. “The planning to create much larger consolidated distribution centres has started and this will be a major contributor to a better profit line in the future.” The directors have declared a fully franked final dividend of 30 cents for shareholders. In addition, a fully franked special dividend of 10 cents will be paid on November 19, 2004, making a total dividend of 65 cents for the year, an increase of 18.2% on last year.
Building To Remain Robust Over Next Two Years
The building industry in general will remain strong throughout 2005 and 2006, according to leading economic forecaster, BIS Shrapnel. In its latest publication, Building In Australia 2004 to 2019, the company states that home building is running close to demand which it estimates to be about 164,000 dwellings per annum. Strong overseas migration has pushed up underlying demand for new dwellings, and land constraints have led to greater activity in metropolitan ‘knockdowns’ and medium density housing.
Domestic house construction is tipped to remain strong until 2007
However, national dwelling commencements are forecast to edge down over the next two years, as investor financed construction eases, due to caution regarding the outlook for residential property. High-density dwelling activity will be the main hindrance to growth in building commencements, particularly in the inner-city apartment markets in Sydney and Melbourne. Queensland is expected to be the notable exception to this trend.
As residential commencements slide in the next two years, the baton will pass to the non-residential building sector which is expected to maintain the pace in overall building activity. A surge in non-residential building during 2005/6 will be kicked along by a boom in office building as strong employment growth leads to renewed investor interest. The upswing in non-residential building is forecast to drive national building activity to a record high in 2005/6, although substantial increases in interest rates in that year are expected to dampen residential building activity. As the negative impact of high interest rates broaden across the economy in 2006/7, a severe downturn in all building sectors in 2007/8 is expected. Dwelling commencements are forecast to fall to an annual number of 132,000 at the bottom of the residential building cycle in 2007/8, before recovering in 2008/9.
on-residential commencements are forecast to continue to decline into 2008/9, due to excessive construction in 2005-7, which is expected to lead to an oversupply in the office, retail and hotel sectors. For more information visit: www.bis.com.au
Shake-Up At Bunnings
In a major change at Bunnings, John Gillam, 38, has been appointed Managing Director. Peter Davis, who has been Managing Director of Bunnings since January 2003, has assumed a new role as the company’s Chief Operating Officer with responsibility for store operations, merchandising and marketing and property.
The Managing Director of Wesfarmers, Michael Chaney, said the Bunnings appointments would better equip the business to manage the challenges associated with rapid growth and to address strategic issues. “The point has been reached where due to the scale of the operations there is a need for extra management resources at the most senior level,” he said. “Peter Davis is a great retailer and his new position will allow him to focus on the essentials of the business—product range, service and price—as well as growing the network through the store rollout program.
“John Gillam knows Bunnings from his previous two years there as chief financial officer, and will bring to the business the leadership skills he has displayed in successfully running CSBP over the last two years. He will drive increased efficiencies which are so important to a business this size and will pursue broader growth opportunities.” A chartered accountant with a Bachelor of Commerce degree from the University of Western Australia, John Gillam joined the Wesfarmers Limited Business Development department in 1997. He was chief financial officer with Bunnings from 1999 to 2001, Company Secretary of Wesfarmers Limited from 2001 to 2002, and was closely involved in the acquisition of Howard Smith Limited. Gillam was appointed Managing Director of CSBP Limited (a Wesfarmers company) in 2002. He is President of the Australian Institute of Management in Western Australia, a member of the Senate of Murdoch University, and a director of the Plastic and Chemicals Industry Association.
Keep yourself up to date with more of the latest news in the September issue of the Hardware Journal.