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


Methven FY profit drops 8.6% on strong currency, inventory

Methven annual profit drops 8.6% on strong currency, inventory woes

By Suze Metherell

May. 22 (BusinessDesk) - Methven reported an 8.6 percent fall in full-year profit as the tap maker and distributor struggles with retailers holding smaller inventories, and as the strength of the New Zealand dollar erodes exported earnings.

Net profit fell to $4.7 million in the year ended March 31 from $5.2 million a year earlier, the Auckland-based company said in a statement. Revenue fell 1.7 percent to $96.7 million.

Sales to Australian customers grew 5.8 percent to A$35 million, though that didn't translate to higher profits with Methven's margins squeezed by competitive pricing, the strength of the kiwi currency and increases in supply chain costs. Australian stock reduction programmes from retailers in the market continued longer-than-expected, causing it to cut full-year earnings guidance twice this year. High Australian stock levels led to a 48 percent increase in Methven's debt to $17.2 million in 2013.

The company has since reduced its debt 16 percent to $14.5 million but that's forecast to rise with the purchase of its Chinese production partner, Invention Sanitary mid this year. Methven will pay four times the manufacturer's profit for the 12 months ended June 30, 2014, up to a maximum of $8 million. The Chinese acquisition is expected to add an annual $2 million to net profit after tax from September.

New Zealand sales rose to $35.1 million from $34.9 million the previous year, slightly below its own expectations, the company said. UK earnings before interest, tax, depreciation and amortisation was $1.1 million, up from a break-even position as revenue showed "slight growth".

Methven's board declared a final dividend of 4.5 cents per share payable June 30.

Shares in the NZX listed tap maker fell 0.8 percent to $1.18 and have declined 3.3 percent in the past year.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Welcome Home: Record High Migration Stokes 41-Year High Population Growth

New Zealand annual net migration hit a new high in October as more people arrived from than departed for Australia for the first time in more than 20 years. More>>


Citizens' Advice Bureau: Report Shows Desperate Housing Situation Throughout NZ

CAB's in-depth analysis of over 2000 client enquiries about emergency accommodation shows vulnerable families, pregnant women and children living in cars and garages, even after seeking assistance from the Ministry of Social Development and Housing New Zealand. More>>


Speaking For The Bees: Greens Call For Neonicotinoid Pesticide Ban

The National Government should ban the use of controversial pesticides called neonicotinoids after evidence has revealed that even at low doses they cause harm to bee populations, the Green Party said today. More>>


Science Awards: NZAS Celebrate NZ Scientific Achievements

The Marsden Medal is awarded for a lifetime of outstanding service to the cause or profession of science, in recognition of service rendered to the cause or profession of science in the widest connotation of the phrase. This year’s medal is awarded to Dr Mike Andrews. More>>


Court Rules: Affco 'Unlawfully' Locked Out Meat Workers

The note says the full court found for the plaintiffs, "that is that the defendant locked out the second plaintiffs unlawfully and that it breached s 32 of the Act by acting otherwise than in good faith towards the plaintiffs while collective bargaining was still going on." More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news