Eco Investor November 2015

Core Securities

Gale Pacific Strategy Working

Gale Pacific's restructuring appears to be working with the company upgrading its earnings guidance for the first half and in response its shares hit a one year high of 30 cents.

The new guidance is profit before tax of between $2.75 and $3.25 million with the full year profit before tax expected to be weighted to the second half when growth on the previous corresponding half is also expected.

Group managing director Nick Pritchard said there have been improvements in the Australian supply chain and warehousing processes, inventory reductions, and robust revenue growth over the prior year. Revenue in the first three months was up 26 per cent compared to 2014- 15.

The company has decided to exit some product categories it said are immaterial, including ergonomic seating and lumbar supports, pet kennels, bath mats, hammocks, folding doors, cable ties and others. It said these are outside its core competence and added complexity and cost to its operations.

Exiting them also improves Gale Pacific's focus on its core environmentally positive products such as sun and window shades that fulfil its aim to protect and enhance environments. Its key products are architectural shade fabrics, window shades, shade sails and horticultural and agricultural fabrics for crop protection, irrigation, water storage and screening. It also markets interior window furnishings, glass DIY pool fencing and balustrading, shower screens and other glass products. (ASX: GAP)


Gale Pacific’s key brands and products.

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