Paint, adhesives and garden care products supplier DuluxGroup Ltd (ASX:DLX) today posted $61.289 million net profit for the its first year as a standalone entity in fiscal 2010 and said it expects profit to grow further.

Effective 9 July 2010, DuluxGroup ceased to be a subsidiary of Orica Limited and became a separately listed entity on the Australian Securities Exchange on 12 July 2010.

The consolidated financial results presented for DuluxGroup for the financial year ended 30 September 2010 do not reflect the full 12 months results for several operations that comprise DuluxGroup currently and at the time of the separation from Orica Limited, DuluxGroup said in a statement.

On a pro-forma basis, DuluxGroup net profit in fiscal 2010 before one-off demerger costs was $71.5 million, reflecting a full year of operations. Accounting for one-off demerger costs of $2.8 million (after tax), pro forma NPAT was $68.7 million.

The company has declared a final dividend of 3.0 cents per share, fully franked, representing a 70 per cent payout ratio on pro forma NPAT before one-off demerger costs, pro-rated to reflect the 2.7 months of operations following demerger from Orica Limited to 30 September 2010.

DuluxGroup chief executive Patrick Houlihan said "To deliver record EBIT when our businesses continued to face quite challenging market conditions is very pleasing."

"DuluxGroup has continued to profitably outperform in its core markets by building on our market leading positions and proven capabilities."

The Australian Paints business achieved a record result with pro forma sales up 5 per cent and pro forma earnings up 6 per cent to $91.9 million, reflecting a modest market recovery, further profitable market share gains and some benefit from a stronger Australian dollar.

Earnings declined in the New Zealand Paints business to $10.3 million, down $1.1 million or 9.6 per cent, adversely impacted by the strong Australian dollar on translation and the one-off expense associated with the significant upgrade of the Gracefield paints factory in Wellington. Excluding these factors, pro forma earnings increased 4 per cent, reflecting - in part - full year productivity benefits from a significant cost restructuring programme undertaken in 2009.

DuluxGroup projects further growth in fiscal 2011.

"We expect 2011 DuluxGroup net profit after tax (before individually material items) to be higher than $71.5 million, being the 2010 pro-forma net profit after tax before one-off demerger costs, subject to economic conditions," the company said.