Sharechat Logo

Methven cautiously optimistic about second half performance

Friday 29th November 2013

Text too small?

Methven, the tapware maker, confirmed a 21 percent rise in first half earnings and said it was "cautiously optimistic" about the remainder of the year.

Net income rose to $2.8 million in the six months ended Sept. 30, from $2.3 million in the year earlier period, the Auckland-based company said in a statement, confirming figures it first flagged on Oct. 15. Sales fell 1.8 percent to $49.4 million.

Methven is betting an improved performance in the first half will continue for the remainder of the year, following a drop in profit last year. The purchase of its Chinese manufacturing operation will weigh on New Zealand earnings this year, amid improving returns from the UK and Australia, the company said today.

"In the face of tough economic condition in recent years, the business has proven resilient," chairman Phil Lough and chief executive Rick Fala said in a joint statement. "Rigorous cost control measures have secured our earnings as we've weathered the worst of these conditions, and while these measures will continue, the key focus moving forward will be revenue growth through innovative products and marketing activities.

"We are pleased with the turnaround and are cautiously optimistic that the first half's improved performance can be sustained."

First half sales in New Zealand rose 4 percent to $18.4 million while earnings before interest, tax, depreciation, amortisation and one-time items rose 4 percent to $4.4 million.

In Australia, sales rose 4 percent to A$17.1 million amid "difficult trading conditions" while earnings fell 5 percent to A$1.6 million as the company spent $200,000 more on marketing.

In the UK, overall revenue slipped 3 percent to 6 million pounds on lower export sales to the Middle East and South Africa while domestic sales rose 4 percent. The unit posted earnings of 197,000 pounds, a turnaround from a loss of 184,000 pounds in the year earlier period as costs fell 17 percent.

In the latest period, Methven spent $348,000 related to its agreement to buy its Chinese manufacturer.

Methven's net debt, which jumped 48 percent to $17.2 million last year because of higher stock levels in Australia, fell 25 percent to $14.4 million as of Sept. 30, compared with the same period a year earlier.

The company will pay a 5 cent dividend on Dec. 31, up from 4.5 cents a year earlier.

Methven shares slipped 0.7 percent to $1.47, crimping their gain so far this year to 8 percent.

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report