Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Methven Maintains Profitability and Delivers Dividends

NZX Statement 29 November, 2012

Methven Maintains Profitability and Delivers Dividends

• Results broadly in line with guidance.

• Group reported NPAT fell 27.4% on the prior corresponding period from $3.2 million to $2.3 million.

• Underlying Group NPAT2down 19.5% from $2.9 million to $2.3 million.

• Net Debt increased 10.5% from $17.4 million to $19.2 million.

• Group Operating Revenue down 7.2% from $54.2 million to $50.3 million.

• EBITDA1down 14.2% from $6.8 million to $5.8 million.

• Both Australia and New Zealand delivered an increase in EBITDA1.

• UK EBITDA1 down as increase in sales resource only delivered modest sales increase.

• Partially imputed interim dividend of 4.5 cents per share to be paid on 31 December 2012.


1 EBITDA is earnings before interest, tax, depreciation, amortisation and non-operating foreign exchange gains/(losses).

2 Underlying Group NPAT is net profit after tax adjusted for the impact of one-offs in the prior year ($314,000). These one-offs relate to Focus (DIY) Limited and include the debt recovery, inventory recovery and one-off costs.

Despite the continued tough global economic conditions, leading New Zealand shower and tapware designer Methven Limited [MVN], maintained profitability in the first half to deliver an interim dividend, similar to last year, of 4.5 cents per share. The partially imputed interim dividend will be paid on 31 December 2012.

According to Group CEO, Mr Rick Fala, despite the challenging conditions the business has been able to maintain profitability, primarily through continued tight cost control measures and improvements in operational efficiencies.

“Unfortunately, global market conditions continue to impact the Methven business, with the uplift in second quarter earnings not sufficient enough to offset the forecast weak first quarter,” Mr Fala said.

A key driver of the half year results has been the underperformance of the UK business. While Operating Revenue was up 1.0% from £5.97 million to £6.03 million, tighter margins and the increased investment in the UK sales team, which is yet to deliver a significant sales uplift, resulted in EBITDA1 falling from £0.5 million profit to £(0.2) million loss.

On the positive side, both the Australian and New Zealand businesses delivered an increase in EBITDA1, up 18.1% and 8.2% respectively.

Net Debt increased 10.5% from $17.4 million to $19.2 million, largely driven by short term tightening of supplier payment terms. This was at the lower end of guidance of $19 million to $21 million.

“Returning the UK business to profitability is a key priority. With water conservation a focus across UK, the team are involved in a number of water saving initiatives including the newly introduced national Water Label Scheme. A solid platform is now in place to launch the expanded 2013 Methven shower and tapware range which focuses on our water and energy saving Satinjet® technology,” Mr Fala said.

“In addition, the realisation of further operational efficiencies will assist in returning the UK business to positive EBITDA1 in the second half.”

Design and innovation continue to remain a focus and with over 40 new products launched in the first half, the business is expecting strong second half sales performance.

“Customer feedback on our new ranges is very positive and we are particularly encouraged by the new tapware ranges hitting in the Australian market, where Methven has a relatively low penetration in the tapware category,” Mr Fala said.

The business also remains committed to investment in new markets and channels with the increased investment in China delivering strong sales growth, up 116%, albeit off a small base.

“Alongside our continued expansion in China, we are exploring opportunities in areas suffering water and energy shortages. A recent contract win in South Africa for our Satinjet showers serves to highlight the potential opportunities for our proprietary technology around the globe.”

Maintaining cost control disciplines and further improvements to operational efficiency remain an important focus throughout the business and are expected to be a positive influence on the second half year result.

According to Methven Chairman Mr Phil Lough, despite the temporary increase in debt levels, the business is confident of generating positive cash flows and reducing debt levels in the second half, although it still remains imprudent to provide guidance.

“The Group’s solid financial position ensures we are still well within our bank covenants and debt facility limits. This has enabled the Directors to declare a partially imputed dividend of 4.5 cents per share to be paid on 31 December 2012,” said Mr Lough.

“The business continues to maintain profitability and provide solid returns to shareholders and we are pleased to have consistently delivered full and half year dividends since listing on the stock exchange in 2004.”

Methven remains committed to delivering a stronger second half performance by executing the current strategy.

“We remain committed to delivering improvements in our core markets through the roll out of award winning proprietary shower and tapware and a differentiated experiential brand and marketing strategy,” Mr Fala said.

For more company information, visit www.methven.com

--

About Methven:

A pioneer in bathroom and kitchen plumbing for over 125 years, Methven is New Zealand’s oldest and largest designer of shower and tapware to builders, plumbers and home renovators. Today, Methven is a world-class international business with our proprietary technology, shower systems and tapware ranges earning a reputation for innovation, high quality, and water and energy efficiency. Methven has won prestigious design awards worldwide for the innovative functionality and water and energy saving aspects of our products including the prestigious Red Dot and Good Design Awards.

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Power Outages, Roads Close: Easter Storm Moving Down Country

The NZ Transport Agency says storm conditions at the start of the Easter break are making driving hazardous in Auckland and Northland and it advises people extreme care is needed on the regions’ state highways and roads... More>>

ALSO:

Houses (& Tobacco) Lead Inflation: CPI Up 0.3% In March Quarter

The consumers price index (CPI) rose 0.3 percent in the March 2014 quarter, Statistics New Zealand said today. Higher tobacco and housing prices were partly countered by seasonally cheaper international air fares, vegetables, and package holidays. More>>

ALSO:

Notoriously Reliable Predictions: Budget To Show Rise In Full-Time Income To 2018: English

This year’s Budget will forecast wage increases through to 2018 amounting to a $10,500 a year increase in average full time earnings over six years to $62,200 a year, says Finance Minister Bill English in a speech urging voters not to “put all of this at risk” by changing the government. More>>

ALSO:

Prices Up, Volume Down: March NZ House Sales Drop 10% As Loan Curbs Bite

New Zealand house sales dropped 10 percent in March from a year earlier as the Reserve Bank’s restrictions on low-equity mortgages continue to weigh on sales of cheaper property. More>>

ALSO:

Scoop Business: Chorus To Appeal Copper Pricing Judgment

Chorus will appeal a High Court ruling upholding the Commerce Commission’s determination setting the regulated prices on the telecommunications network operator’s copper lines. More>>

ALSO:

Earlier:

Cars: Precautionary Recalls Announced For Toyota Vehicles

Toyota advises that a number of its New Zealand vehicles are affected by a series of precautionary global recalls. Toyota New Zealand General Manager Customer Services Spencer Morris stressed that the recalls are precautionary. More>>

ALSO:

'Gardening Club': Air Freight Cartel Nets Almost $12 Million In Penalties

The High Court in Auckland has today ordered Swiss company Kuehne + Nagel International AG to pay a penalty of $3.1 million plus costs for breaches of the Commerce Act. Kuehne + Nagel’s penalty brings the total penalties ordered in this case to $11.95 million ... More>>

ALSO:

Crown Accounts: Revenue Below Projections

Core Crown tax revenue has increased by $1.9 billion (or 5.0%) compared to the same time last year. However this was $1.1 billion less than expected and is reflected across most tax types, continuing the pattern of recent months. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news