Why Resene Paint is under pressure

Resene Paint has been the company of colour for 78 years, but the family-owned business is now facing margin pressure as its costs increase in this economic environment.

“We lag the construction industry, which is under pressure,” Resene chief financial officer Mike Durkin told Markets with Madison at its Lower Hutt manufacturing plant.

“We’re sort of flatlining on revenue, it’s staying there, but costs have zoomed up, particularly getting material into the country.”

About 70% of the business' revenue came from commercial customers, Durkin said, with the latter from retail home renovators.

“[The] construction industry is under pressure, so there’s demand pressure there.

“Some of the big group housing companies who are our customers, their [building] consents year on year are like 40% down.”

The retail side of the business was struggling because consumers had less disposable income to spend, he said.

“Buying and selling residential homes is quiet, which is obviously a key part of our business.”

But it did have a bright spot in its smaller businesses that sold paint for aircraft, cars, steel and fire protection.

“Our smaller companies have actually kept us in the game because they’re in different markets, not the residential market.

“But the main business, which is the Resene business you’d be familiar with, is, like everybody else, struggling.”

Go inside Resene’s paint factory and hear more about the business' finances in today’s episode of Markets with Madison above.

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Madison Reidy is host and executive producer of the NZ Herald’s investment show Markets with Madison. She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters.