GWA Group Limited (ASX:GWA): A Pipeline of work to come
GWA Group Limited (ASX:GWA): A Pipeline of work to come. The group manufactures, imports and distributes bathroom & kitchen products, door & access systems products, and heating/cooling products. The balance sheet is in excellent condition with net debt/shareholders' funds of 34% and an interest cover (EBIT) of 11.5x. The share price has now fallen by 17.5%, from $3.08 on 21 August to the current $2.54, and the FY15 PER is 14.6x (23% EPS growth). We are expecting a capital return to replace any fully franked dividend in FY15 followed by a fully franked dividend yield of 4.7% (1.7x covered) in FY16. Our rating downgrade from Buy to Hold at $3.06 (19 August) has proved correct but we are now happy to start buying again at these much lower levels.
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