Shriro Holdings Limited (ASX:SHM) CEO, Mike Westrup discusses consumer product distribution and growth strategy Shriro Australia
(ASX:SHM) is a leading sales and marketing organisation for consumer products in Australia and New Zealand. We’ve got a mixture of businesses. We distribute Casio products in Australia and New Zealand exclusively, we’ve distributed that brand for over 32 years. We also too, own our own brands. Omega Appliances is a leading cooking appliance brand, whereas Robinhood Rangehoods is one of the leading rangehood brands in Australia and New Zealand. Everdure is a company quite well known, a brand well known, because it’s also a major supplier of barbeques in Australia.
The highlights were the reduction in debt. We were able to reduce our debt to under $10 million and consequently, as a result of that, our EBITDA to debt ratio is 0.4. But the real big highlight was that we were able to increase our net profit after tax, by over 39 per cent on last year. This was 24 per cent above prospectus forecast.
We were very happy that we achieved those results through a number of factors. We achieved them through increasing our gross margins, irrespective of the exchange rate variances that were occurring. But also too, through a major control of our cost structures, as well as increasing sales revenue. The final dividend that we paid was six cents and it was fully franked shares.
For kitchen appliances, we have three brands, Robinhood, we also distribute Blanco and Omega is the other brand that we own. We’ve been able to take advantage of the huge reinterest in cooking in Australia and New Zealand, for shows such as MasterChef etc. And as a result of that, and also to an increase in housing estates that have been built in the outskirts of the various cities, our business has increased quite nicely over the last four years.
Consumer products are made up of Casio and Everdure; Casio’s a really interesting area. We’re the leading school calculator supplier in Australia, with market share anywhere between 85 and 95 per cent. We’ve developed that role over a period of 20 years, by having some of Australia’s leading mathematicians working with Casio in Japan, to develop calculators specifically for the school education system of Australia.
Also too we distribute through Casio G-shock watches, which is probably one of the hottest under 30 brands in the world right now. The Everdure brand, our first major acquisition was in 2001 and we purchased Everdure. At that time, it was a broken down gas-heating brand and we were able to develop into a leading barbeque brand. And consequently to that, we’ve further expanded it into cooking appliances.
The sales revenue line is the best to actually analyse and it’s about 55 per cent consumer products, 45 per cent appliances. With the brands that we own, what we want to do is grow the product portfolios within those brands. Also too, what we’re looking at doing is expanding our business into the northern hemisphere. We’re very much middle to upper-middle market in all of our product brands that we have. It’s an area where there’s high discretionary and people, especially in the cooking business, who appreciate good food or appreciate good barbeques and good cooking appliances.
We’d like to see and we’re confident that it’s going to continue to grow. This year it’s going to be moderate growth, but we believe in 2017 and 2018 with what we’ve got in place, for those years there’s going to be significant growth.
Ends
