Daily ShareChat: Methven

Tap and shower-ware manufacturer Methven's earnings in recent years have been impacted by the New Zealand and Australian housing market downturns but the company has achieved growth through increased share of the Australian market, says McDouall Stuart.

“Further market share gains are anticipated in Australia,” the broker says.

Turning around its British operation is the company's main priority. “Economic conditions in the UK are likely to remain difficult but the company intends to reposition the business to the higher value Methven branded premium market,” it says.

Following the recent appointment as chief executive in Britain of Steve Lee, the former chairman and chief executive of Bristan, the largest British tapware supplier and previous head of the British Bathroom Manufacturers Association, the company is aiming to break even by year end.

Methven is targeting the international premium market using in-house and acquired proprietary technology, McDouall Stuart says.

“The strength of its technology is captured in winning the international Red Dot Award as being among the 'best of the best' in design and innovation in the world. Major awards have also been won in Australia and New Zealand.”

Methven will launch its new range at a premier international plumbing trade show in Frankfurt in March next year.

McDouall Stuart says Methven's offshore sales are now about two-thirds of total sales and should increase.

Recommendation: Buy.

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