Masco reports strong 2015 results

Masco has reported a strong fourth quarter in 2015, with a three per cent increase in sales to $1.7 billion (approx. £1.17bn).

Gross margins improved in Q4 to 31.3%, compared with the same period in 2014 (29.1%) and operating margin increased to 12.8% (10% in Q4 2014).

The home improvement and building products giant, which owns companies such as Hansgrohe, Hüppe, Bristan and Moores Furniture Group, saw growth in its plumbing products, with net sales increasing 5%. Cabinets and related products sales also increased by the same amount, which was fuelled by growth in the retail and dealer channels.

However, it reported a 4% decrease in decorative architectural product sales. The company said this was due to challenging year-over-year comparisons driven by the timing of inventory replenishments in 2014.

For the whole of 2015, it saw a 2% increase in sales to $7.1bn, compared with the previous year. Adjusted operating profit also grew 19% to $927 million.

“2015 was a transformative year for Masco,” said president and chief executive Keith Allman. “On June 30, 2015, we successfully completed the spin-off of our services businesses, transforming Masco into a branded home improvement and building products company.

“Our clear strategy and focused execution enabled us to reach a number of milestones. We achieved record sales at Delta, Hansgrohe and Watkins and returned our U.S. cabinet business to profitability by improving adjusted operating profit over $80m. We also strengthened our balance sheet by generating nearly half-a-billion dollars in free cash flow and we ended the year with $1.7bn of liquidity. Furthermore, we demonstrated our continued commitment to return capital to shareholders by increasing our dividend and repurchasing over 17m shares.”

Allman also commented that Masco feels confident about the outlook for 2016. He said: “We look forward to capitalising on the momentum we’ve built this past year. We remain confident in our ability to successfully execute against our long-term growth strategies by leveraging our industry leading positions, robust innovation pipeline and our Masco Operating System. We expect that these growth strategies, coupled with our disciplined capital allocation approach, will continue to create shareholder value in 2016.”

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