Business

Thu May 22 03:10:11 PDT 2008

* Plans to enter new markets including China and India in

next couple of years

* Says keeps guidance for 2008 EBITDA above A$37 mln

By Geraldine Chua

SYDNEY, May 22 (Reuters) – Australian appliance maker Housewares International Ltd <HWI.AX> wants to grow its overseas business by moving into fast-growing markets including China and India over the next two years, its chief executive said.

With domestic interest rates at 12-year highs and prices from food to fuel rising, Housewares, which started as a small importer in 1957, noted that growth was slowing in its key Australian market.

"The Australian market is a mature market and, while the small appliance business is a market still growing, in these difficult times obviously it’s not growing at the same level as it was a few years ago," Chief Executive Officer Paul Hill told Reuters in an interview.

"We have a global business of which Australia is still the most important part, but we’re equally aggressively growing our business in North America and Europe and looking at new opportunities in places like China, India and Africa over the next couple of years."

Its Australian business accounted for nearly half of the company’s total sales in the first-half to December 2007, but domestic sales slipped 24 percent, while international sales jumped 50 percent.

The company, which has a market value of about A$181 million ($174 million), sells espresso makers, blenders and toasters under the Breville and Kambrook brands, and distributes Philips appliances in Australia and New Zealand.

Hill said the company hopes to enter the booming China market over the next 12 months, targetting increasingly affluent Chinese consumers.

"There are 10,000 manufacturers in China of A$5 toasters. That’s not the business we’re going to be in," he said.

Houseware’s Breville espresso makers costs between A$149 to A$600 in Australia.

In February, Housewares reported a first-half net profit of A$16.2 million and said that its underlying earnings before interest, tax, depreciation and amortisation (EBITDA) in fiscal 2008 was likely to exceed A$37 million.

"We’re not altering the guidance that we’ve given to the market and what we’ve always maintained was the lower range of that guidance," Hill said.

According to the average forecast of five analysts polled by Reuters Estimates, Housewares is expected to report an EBITDA of A$39.2 million in fiscal 2008.

The company is expected to post net profit of A$21.5 million in fiscal 2008. It had posted a net loss of A$34 million in fiscal 2007 after selling off its loss-making Sabco brushware and Australian homewares businesses.

Housewares’ competitors in Australia’s small appliances market, worth over A$1 billion, include GUD Holdings Ltd <GUD.AX>, best known for its Sunbeam appliances, and Japan’s Kenwood Corp <6765.T>. ($1=A$1.04)

(Reporting by Geraldine Chua; Editing by James Thornhill)

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