Saturday, October 25th6.0°C
23888

Richelieu Hardware sees profit rise on flat Canadian market, slow U.S. recovery

MONTREAL - Richelieu Hardware says it continues to prosper as a slowly improving U.S. home renovation market compensates for a stalled Canadian sector.

"Canada is rather flat all over the place," CEO Richard Lord said Thursday following the company's annual meeting.

The Montreal-based manufacturer and distributor produces hinges, fasteners and other hardware for the manufacturing, home renovation and retail sectors as well as other products. Its portfolio includes about 100,000 products sold to 70,000 customers in North America.

Lord said the Canadian market, which accounts for about three-quarters of Richelieu's sales, isn't growing much but the company needs to constantly introduce new products to maintain its leading market share.

In addition to eco-friendly products and weather-resistant materials for outdoor use, Richelieu (TSX:RCH) has entered the glass market by acquiring Vancouver-based hardware supplier Hi-Tech Glazing Supplies last year.

Lord said he's not concerned about the problems facing Canada's largest home renovation retailer Rona (TSX:RON), saying its other large Canadian customers have similar challenges adjusting to weak consumer demand.

"The market for retail hardware has been difficult for the last three years. I think they're all in the same bag... but that should improve in the future. It cannot be worse," he said.

Lord said the company's task is to help retailers earn solid returns on the products they sell and expand the number of items it sells in those stores.

In the United States, the home renovation market has fallen by about 40 per cent following the 2008 economic crisis, but it looks like it is slowly improving, especially along the East Coast where Richelieu has its greatest presence.

"We don't expect a big boom but a slow growth in the years to come," he said.

Richelieu said Thursday that it earned $8.8 million in the three months ended Feb. 28, up 8.2 per cent from a year earlier.

Its first-quarter profit amounted to 44 cents per share, up 12 per cent from 39 cents per share in a year earlier.

On the Toronto Stock Exchange, Richelieu's shares hit a new all-time high of $51.30 before closing up $1.35, or 2.73 per cent, at $50.82.

Lord said the results are "very good under the circumstances in Canada" and exceeded forecasts in the U.S. because of efforts it has taken to increase its market penetration.

Richelieu's sales rose to $136.1 million in the quarter, up from $126.1 million a year before. Internal growth accounted for most of the increased revenue, bolstered by acquisitions.

Canada accounted for $98.5 million of its total sales in the quarter, up 3.8 per cent from a year before. Sales to manufacturers grew four per cent to $79 million while sales to hardware retailers and renovation superstores was up 2.9 per cent to $19.5 million.

U.S. sales grew 10.6 per cent to US$34.6 million, mostly from internal growth. Sales to manufacturers surged 13.2 per cent and offset a 15 per cent decrease to retailers.

The company's Canadian sales included contributions from Procraft Industrial Ltd, a finishing products distributor with three distribution centres that Richelieu acquired in the Maritime provinces in December.

The U.S. sales included CourterCo, a distributor of specialty and decorative hardware with three locations in Indiana, Kentucky and North Carolina.

Richelieu entered into two agreements in principle in March to acquire two distributors of specialty hardware that would add some $14 million of annual sales.

Follow @RossMarowits on Twitter

The Canadian Press


Read more Business News

23658


Recent Trending




Today's Market
S&P TSX14543.82+56.99
S&P CDNX805.45-3.15
DJIA16805.41127.51
Nasdaq4483.715+30.923
S&P 5001964.58+13.76
CDN Dollar0.8901-0.0003
Gold1231.20+2.10
Oil81.02-0.73
Lumber336.40+6.80
Natural Gas3.631+0.009

 
Okanagan Companies
Pacific Safety0.105-0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.15-0.02
Cantex0.07+0.015
Anavex Life Sciences0.194-0.004
Metalex Ventures0.045+0.005
Russel Metals33.39+0.23
Copper Mountain Mining2.03-0.05
Colorado Resources0.145+0.005
ReliaBrand Inc0.012-0.001
Sunrise Resources Ltd0.05-0.01
Mission Ready Services0.445+0.035

 



23901

FEATURED Property
20490347080 Sun Valley Road
3 bedrooms 3 baths
$749,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


What I learned in China

Photo: ContributedI will never be an expert on China. It is just too big, too complex and too old with layers of history and meaning that would take several lifetimes to unravel. As I said to my hosts...


We can get on together

I was in LA this week. I witnessed such crazy and unusual circumstances as I strolled along Hollywood Blvd and Sunset Blvd. A far cry from sleepy Peachland in the Okanagan! The strange thing was, I f...


Weakening global growth worries

The Big Picture Growth worries persist Worries about weakening global growth and its potential impact on the US economic recovery roiled markets around the globe this week. Europe continues to be the ...

_








Member of BC Press Council


22632