20/02/2014 - 13:04

Fleetwood profit down

20/02/2014 - 13:04

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Demountables and recreational vehicles manufacturer Fleetwood Corporation has posted a half year profit loss of $4.2 million, down 18 per cent on the prior corresponding period.

Fleetwood profit down
Fleetwood Corporation has flagged relatively weak trading conditions with some signs of improvement.

Demountables and recreational vehicle manufacturer Fleetwood Corporation has posted a half-year profit loss of $4.2 million, down 18 per cent on the prior corresponding period.

Despite revenue being up 28 per cent due to introducing new products from its recreational vehicles division and higher sales of transportable buildings to schools, Fleetwood said lower overall margins for the group reflected tough trading conditions.

“Overall conditions in the group’s key markets continued to be weak for most of the first half,” the company said in a statement.

Fleetwood took a hit in its accommodation building division after softening demand disturbed some of its plans.

It cancelled a transient workers’ accommodation village project planned for Gladstone in Queensland, on which it had already spent $1.5 million for pre-commitment and development costs.

In Western Australia, its Searipple Village in Karratha averaged 50 per cent occupancy rates in the half year, with Fleetwood saying occupancy may be even lower in the second half of the year due to further subdued demand.

Its Osprey Village in South Hedland was recently completed and is slated to open in March once Fleetwood finalises commercial terms with the Department of Housing.

Fleetwood’s recreational and commercial vehicles business suffered from weak demand for most of the first half, but a 56 per cent increase in caravan and camper production this half year, and increased sales of new Camec and Flexiglass products sourced from Asia, significantly boosted its revenue.

Fleetwood said it would continue to lift revenue by sourcing products from Asia and that restructures started in 2013 were also beginning to have a positive effect, along with recently increased demand.

“Improved consumer sentiment has increased demand for recreational vehicles resulting in a positive trend in new builds since September 2013. Fleetwood expects its caravan production to continue to improve, and include a shift in the production mix to higher specification caravans,” the company said.

Fleetwood flagged improved conditions in its sales of demountables to schools and in its recreational vehicles division.

It predicted sales of accommodation options to the mining industry would continue to be patchy.

“Tendering activity in the resources sector is solid. However, contract awards can be patchy caused by project cancellations and delays, and by clients redefining their requirements,” Fleetwood said.

Fleetwood also said it would target business development options for affordable housing because it saw opportunities in this sector for developing larger projects.

Fleetwood announced a dividend of 2 cents per share.

Following its profit announcement its shares were down 6.3 per cent to $2.67.

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