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Methven posts 29% profit gain

Thursday 30th October 2008

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Methven posted a 29% increase in first-half profit, reflecting its first full contribution from its Deva unit in the UK and increased sales in Australia.

Net income rose to NZ$4.96 million, or 7.45 cents a share, in the six months ended September 30, from NZ$3.84 million, or 5.76 cents a year earlier, the company said in a statement. Sales soared 66% to NZ$71.8 million.

Methven acquired Deva Tapware in September 2007 for NZ$59 million, increasing its geographic spread of sales and providing a buffer from slowing revenue at home. The shares rose 1.5% to NZ$1.32 today and have fallen 36% this year.

"We're now seeing the true benefit of an international spread of markets," chief executive Rick Fala said. "That has allowed Methven to cushion the effect of a slowing New Zealand economy with continued growth in Australia and a reasonable result in the UK, considering the market's weakness."

The company is "well equipped" to maintain profit growth, he said.

In the UK, Methven had ebitda of NZ$3.3 million on revenue of NZ$29.5 million, meeting the company's target.

Australian earnings rose 30% to NZ$1.7 million, while New Zealand earnings fell 8.6% to NZ$6.1 million. The company's US unit posted a NZ$500,000 loss.

Methven raised its first-half dividend to 6.25 cents a share from 5.7 cents.

By Jonathan Underhill

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