quarter Sales Drop
Australia-based Wattyl has reported a drop in first quarter sales, but said the sale of eight of its operations has removed the last of its loss-making businesses from its portfolio. Wattyl sold its struggling U.S. paint businesses, Coronado and Lenmar, in June to a U.S. coatings producer.
The company reported that by exiting the U.S. business it took a $35.6 million charge against 2004 earnings. The company reported a net loss of $22 million in the year ended June 30, compared to a $3.3 million loss in the previous reporting period.
Chairman John Ingram said the sale of the company’s remaining U.S. operations continued a program it began three years ago to restore Wattyl’s earnings. “In the 2002 financial year, we divested four underperforming businesses in Asia and our non-core automotive joint venture,” Ingram said. “In 2003, we commenced the rationalization of our U.S. businesses with the sale of Wasser.”
Ingram said the sale of the U.S. businesses would provide positive cash flow of approximately $7.8 million when the divestment of the two properties is completed.
The company reported first quarter sales for the financial year 2004/05 were down 3.7% compared to the previous year.