DULUXGROUP LIMITED (DLX)



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General Information
Company Name: DuluxGroup Limited
Stock Code: DLX
Website: www.duluxgroup.com.au
GICS Sub-Industry: Specialty Chemicals
Market Cap ($M): 2,153
Equiv. Shares (M): 381

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
$ 5.650 $ 5.650 $ 5.695 $ 5.620 $ 5.650 819,090 0%

Current Broker Consensus Recommendation more
Recommendation: Hold
Recommendation Date: 21st Jan 2014
12 Month Target Price (average): $5.243
Brokers Surveyed: 7

Company Overview

Business Description:
DuluxGroup Limited (DLX) is a manufacturer and marketer of branded products, mainly in coatings, home improvement, and garden care markets. DLX has four main segments namely Paints Australia, Paints New Zealand, Selleys Yates and Offshore. The operations are conducted in Australia, New Zealand, Papua New Guinea, South East Asia and China.

Strategy Analysis:
DLX's strategy to protect and expand the market leading positions occupied by many of its brands in Australia and New Zealand. DLX¬īs focus is primarily on the premium end of the decorative paints and coatings market, ensuring a level of resilience during periods of weaker economic conditions. The acquisition of Alesco adds leverage to a recovery in new housing. The company has built an extensive distribution network of retail outlets through strong relationships with key players in the hardware and supermarket sectors. DuluxGroup reported NPAT down 4% to $89.49m for the year ended 30 September 2012. Revenues from ordinary activities were $1.07bn, up 7% from last year. Diluted EPS was 24.3 cents compared to 25.7 cents last year. Net operating cash flow was $116.53m compared to $85.44m last year. The final dividend declared was 8.0 cents, taking the full year dividend to 15.5 cents compared with 15.0 cents last year. On 30 April 2012, the group acquired 19.96% of the shares in Alesco Corporation for a cash consideration of $37.6m. The interest was acquired preceding the group's off-market takeover offer for the remaining shares in Alesco announced on 1 May 2012. Transaction costs of $3.6m associated with this takeover offer are included in the results of the group for the financial year ended 30 September 2012. These costs are primarily related to consulting and legal fees.


Financial Summary
Year to Sep NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2015  F 117.0 31.3 15.6 18.1 21.0 3.7 100.0
2014  F 101.2 27.1 19.3 20.9 18.0 3.2 100.0
2013  A 82.7 22.7 3.2 18.4 17.5 4.2 100.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2013 A 2014 F 2015 F 2013 A 2014 F 2015 F 2013 A 2014 F 2015 F
DuluxGroup (DLX) $2,149 M 0.2243 0.1472 0.0816 22.3721 19.5021 18.0307 0.0310 0.0359 0.0390

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
DLX 1.33 20.7 9.42 1.82 1.42
Market 1.07 15.9 1.27 2.05 1.71
Sector 0.87 12.0 0.68 0.73 4.83

Directors
Name Position Start Date
Mr Patrick Houlihan Chief Executive Officer,Managing Director 29 April 2010
Mr Stuart Boxer Chief Financial Officer,Executive Director (other) 02 August 2010
Mr Peter Maxwell Kirby Non-Executive Chairman 08 July 2010
Mr Andrew Larke Non-Executive Director 01 October 2010
Ms Chew Gaik Hean Non-Executive Director 02 August 2010
Ms Judith Swales Non-Executive Director 11 April 2011
Mr Garry Arthur Hounsell Non-Executive Director (other) 08 July 2010

Management
Name Position
Simon Black Company Secretary
Tony Bova General Manager - B&D Garage Doors
Alan Preston General Manager - DGL International Asia
Patrick Jones General Manager - Dulux Paints Australia
Julia Myers General Manager - Dulux Paints New Zealand
Michael McMullen General Manager - DuluxGroup Human Resources
Brad Hordern General Manager - DuluxGroup Supply Chain
Stephen Cox General Manager - Parchem Construction Chemicals and Equipment
Mike Kirkman General Manager - Selleys Yates

Substantial Shareholders
Holding Name
28,353,551 (7.52%) Commonwealth Bank of Australia
27,481,035 (7.48%) Westpac Banking Corp/BT Investment Management Ltd

Calendar of Events
Date Event
14 November 2014 Report (Annual)
12 November 2014 Report (Prelim)
12 May 2014 Report (Interim)
© 2011 Morningstar, Inc. All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will have any liability for use or distribution of any of this information. To the extent that any of the content above constitutes advice, it is general advice that has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making any financial investment decision. If applicable investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). DISCLOSURE: Employees may have an interest in the securities discussed in this report. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.asp.

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