Paint sales soar with Australia's new home building boom

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Dulux is seeing strong growth for its paints in the booming new home market but soft sales associated with infrastructure projects.

The paint maker posted a 4% rise in sales to $836.87 million for the six months to March. Net profit was down 17.5% to $49.46 million because of non-recurring restructuring costs. Underlying profit was up 9.3% to $61.4 million.

Dulux is building a new factory in Melbourne and establishing a third party operated distribution centre in NSW.

The company says market growth in new housing was significantly stronger, up 17%. The commercial building business was slower, reflecting soft infrastructure markets.

New home sales in Australia are at a four-year high, with dwelling approvals being led by a surge in apartments.

Dulux’s largest operating segment, paints and coatings Australia and New Zealand, grew sales by 6.2% to $442.4 million.

Market indicators for key markets remain largely positive. Dulux expects 2015 net profit after tax will be higher than the 2014 equivalent of $111.9 million.

The new housing market, which is about 18% of group revenue, is expected to remain strong for the rest of the year.

The board has declared a fully franked interim dividend of 11 cents a share, a 10% increase.

Dulux shares were trading 2.9% down to $6.36.

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