March 14, 2017 / 7:26 AM / 10 months ago

Geberit sees favourable construction market, plans share buyback

* Positive on 2017 outlook

* 2016 net profit 548.2 mln francs, up from 422.4 mln

* Proposes raising dividend to 10 francs per share from 8.4 (Recasts, adds details)

By John Revill

ZURICH, March 14 (Reuters) - Toilet and plumbing supplies maker Geberit sounded an optimistic note about the global construction industry on Tuesday after reporting a 30 percent rise in annual profit and announcing a 450 million Swiss franc ($446.61 million) share buyback.

The Swiss company expects the building industry to “develop favourably” during 2017, it said in a statement, with the recovery in many European countries set to continue.

Around a third of its sales come from new building projects and two-thirds comes from renovation work.

“Overall, a favourable market environment is expected for Germany, the Nordic countries, Switzerland, Austria, France, the Benelux Countries and the countries of Eastern Europe,” the company said in a statement.

It said it expected the situation in Italy and China to stabilise, with a positive business climate in Australia and India developing during 2017.

Geberit’s comments echo the upbeat tone from the German construction industry association which said earlier this year it expected sales in the sector to rise by 5 percent in 2017, driven by higher infrastructure spending and a real estate boom.

Uncertainty linked to Britain’s vote to leave the European Union would cloud the construction industry there, Geberit said. It also expects stagnation in public sector construction in the United States where it sees “moderate” growth in residential building.

Geberit, which makes piping systems and bathroom fittings, reported an annual net profit of 548.2 million francs, up from 422.4 million a year earlier but short of the 557 million expected by analysts in a Reuters poll.

The company had previously reported an 8.3 percent rise in annual sales of 2.8 billion francs.

Higher sales volumes, cheaper raw materials prices and efficiencies generated from its acquisition of Nordic ceramics maker Sanitec, which it bought for $1.4 billion in 2015, helped to boost profitability.

Geberit said it would return more cash to shareholders through a 450 million franc buyback it would likely launch at the end of the second quarter.

It also proposed raising its dividend to 10 francs from 8.4 francs.

$1 = 1.0076 Swiss francs Reporting by John Revill; editing by Jason Neely

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below