Wooden building products company Tenon is expecting a sharp improvement in profitability now the housing market in the United States is improving dramatically.
More than 90% of Tenon's sales are in the United States and it reports its results in US dollars.
It is expecting its operating profit will be $4 million - $5 million in the year ending June and for that to more than double the following year, assuming the US housing market continues to recover and the New Zealand dollar remains within its current range.
Chief operating officer Tony Johnston says the part of the market relating to the building of new houses started picking up about the middle of last year, while the market for renovating houses began to recover about three months ago.
He says as the construction of new houses has picked up in the US, Tenon's share of that sector has increased, and it now accounts for about 45% of the firm's revenue in the US.
Mr Johnston says the home improvement sector has also started to increase as American consumers have started spending money again.
He says through the global financial crisis, the US went from building more than two million houses a month to less than 500,000 while prices of existing homes fell about 40%.
Mr Johnston says in April, US housing permits exceeded one million, while in the past year, US house prices have, on average, risen 11%.
