Home boom, renovations, to almost double Beacon Lighting profit

The housing market and renovations are lighting up sales for Beacon, although home office demand has eased.

Pendant lighting in a bedroom.

The trading momentum seen by Beacon Lighting over the first half of fiscal 2021 has continued into the second half as a buoyant economy and elevated consumer spending pours money into its cash registers.

A fast-rising property market has also helped stimulate demand for lighting, fans and other indoor furnishings, while Beacon Lighting chief executive Glen Robinson also believes the curbs on overseas travel and spending more time at home has encouraged Australians to ramp up renovations.

The good economic news is forecast to almost double Beacon Lighting’s full-year profit, with a prediction of annual net earnings as high as $37.5 million for 2021.

In a trading update, Beacon said after boom conditions through the pandemic, trading conditions had continued to boost retail and online sales. An improvement in gross profit margins and the careful management of expenses had also lifted profit results for the group in fiscal 2021, it said.

While there was still some uncertainty in the economy, in the absence of an adverse material event Beacon Lighting has set out guidance of a net profit of $35.5m to $37.5m for the full year against underlying profit of $20.4m for 2020.

Mr Robinson told The Australian there was demand across the board for his product categories, as the strong property market helped fuel demand.

“What we typically see is that when house prices go up and you start to see more house churn, so people buying and selling, naturally they want to do a bit of an update in their home so that is what is happening at the moment, updates and small renovation activity.”

He said the setting up of home offices, which generated huge demand for lighting products in 2020 as COVID-19 forced many to work from home, was having less of an impact on sales in 2021.

“I think there is still a part of that, but not as significant as it was this time last year, with a lot of offices making some further decisions about working from home arrangements and greater flexibility, people have figured out that’s a requirement for the future and are setting themselves up for the future.

“There is also a renewed focus on the home, not travelling overseas, and spending a bit more on their homes and enjoying the space.”