Howard Smith Posts Flat Results

Hardware and towage group Howard Smith Ltd. pointed to a difficult market for its main hardware and industrial supplies businesses on Tuesday, after posting a flat half year result. Although recent data pointed to a housing recovery, actual spending on hardware was expected to lag housing approvals and a break in economic conditions was not expected until at least mid-year. "The outlook for the next four months is tough," managing director Ian Tsicalas told reporters after the group reported a net profit of A$54.10 million for the six months to December 31, 2000, up slightly on A$53.56 million a year ago. Tsicalas said Howard Smith could still meet earlier forecasts and beat its A$102.9 million 1999/00 full year net profit, saying the first half net profit increase was "sustainable". But the result would depend on a recovery in the housing market and better results for its BBC Hardware division which eked out an increase in sales of just one percent in the first half. Fending off speculation about the sale of its local towage division, Tsicalas said towage was a core asset, adding that he had no advance warning about comments from stevedoring group Lang Corp Ltd. that it wanted to buy the division. Australian towage earnings were expected to improve with savings from lower staff levels, while increased demand for U.K. towage services was also forecast in the second half as new port facilities were commissioned, he said.